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Diosanny

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Hello,

 I posted in late July/early August about the options my district had for 403b providers. I did open a Roth IRA around that time (thanks to those of you who gave me that advice!) but I would still like to open a 403b. After researching the companies, this is the information I have found...

Horace Mann Insurance: 1.25% managing fee, $25 a year, no back end charges

Kades Margolis: $15 a year and they have 2 "options." One has fees upwards of 5% per transaction and the other is 0.90% per asset. $70 closing fee. (And this is the company promoted by the Pennsylvania State Education Association!)

AXA: 1.25% managing fee, a $40 yearly fee (if I remember correctly), on top of all of the other ridiculous fees they have

Voya: 0.80% managing fee, no back end charges, and the representative is salary 

Voya recently became the "preferred" company of my district and apparently they did that by offering such a low fee, but I'm still curious to know if it's a good idea to go through them or if I should still petition the district for better options. 

Thoughts?

 

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Knowing the investment options at each vendor is a must.

If there is a plan that only charges a 5% load (sales fee) and has access to low cost, total market index funds then it would be something to consider if you’re planning on having a long career at this school district.

If voya has low cost, total market index funds then the 0.8% fee is your lowest cost option. It is still high and I encourage you to get your district to add Vanguard and Fidelity, but it looks like the best option you have.

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The above link is to your previous thread. There is still no obvious low-cost 403b vendor on your district’s list. I would not sign up with any of those vendors although I would like to look at their plans and fees in more detail. Can you post internet links to their specific options, especially the VALIC “preferred” plan?

Although your district may not offer their employees the option to contribute to a 457 plan, it is an option that K-12 school districts are allowed to offer. You should have that option, and it’s possible to contribute to either or to both a 403b and a 457 plan. Many states have state-run low-cost 457 plans that K-12 districts can offer. I don’t think PA is one of those ~20 states unfortunately. Getting Fidelity added as a 403b and/or a 457 vendor would be the ideal. Your district can add vendors if they want to, it's up to them, not to the TPA (TSA-CG). There is probably a district procedure for adding vendors.

I see that PA has a new hybrid pension plan for new teachers. https://www.asppa.org/news-resources/browse-topics/pennsylvania-governor-signs-pension-reform-law Are you in the older straight pension plan (called a Defined Benefit plan)? In my state (WA), the newer hybrid plan was made available to those with the previous pension plan, and many switched to it. The WA hybrid plan allows the employee to increase the defined contribution part, so it can be considered a substitute for contributing to a 403b or 457 plan (if there are no low-cost 403b or 457 vendors).

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EdLaFave: The expense ratios for the funds that Kades Margolis has start at .35% and go all the way up to 2.40% (according to the rep)

krow36: I do have the straight pension plan and as far as I know only new employees have the hybrid option. 

               Kades Margolis: https://4kmc.com/mbd/ The website doesn't have a lot of information on it but I've also attached the documents the rep sent me.

               Horace Mann: http://www.efinancialdocs.com/bowne-prospectuses/ProspectusList?action=annuity&group=1&mode=frame 

I cannot find the Voya documents for my specific district online but I have hard copies. I will email the rep and see if I can get an electronic version and share it on here tomorrow.

 

Kades Margolis Enrollment Form.pdf

Kades Margolis Fund List.pdf

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