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Everything posted by gschech

  1. Our advisor will not be getting any commissions from any of the funds in our plan. Metlife will be getting a small % from the American Funds and Calamos. Gary
  2. Joel, the advisor has/will: 1) Developed model portfolios with Metlife using Vanguard and DFA funds that we normally would not of been able to get on our own. We limited ourselves to what vendors we could use. 2) Provide quarterly reviews of the funds in our plan and make recommendations if fund should be replaced. 3) Adjust model mixes when necessary. 4) Will offer assistance in regard to fudiciary responsibility. I would of preferred to go with TIAA-CREF, but the CEO of the company wanted a company with a local presence. TIAA-CREF is out of town. We believe that this was the best we could do at this point in time. Almost anything is better than staying with Valic. Garry
  3. Danc, 1. I just asked Metlife that question today. I'm guessing 3%, but it could be higher. 2. We have about 350 participants with about $6 million in assets. 3. The plan will own the funds. There will be no contract charges. If you could, please explain by what you mean by "locking in a small negative tracking error to a corresponding composite benchmark." Garry
  4. Joel, the advisor fee is 35 basis points. Garry
  5. My company is switching plan vendors from Valic to Metlife. Our new investment options will include a few Vanguard and DFA funds and 5 different model portfolios. We were able to get these fund because our plan will be managed by a certified financial planner and he worked it out with Metlife to get these funds. Here's a moderate model portfolio and the total expenses will be 1.11% which includes fund and service fees. I'm a little concerned about the fees, but I know these are really great funds: DFA In't Value 6% American Funds EuroPacific 4% Vanguard S&P 500 10% American Funds Growth Funds of America 6% DFA US Large Value 14% Vanguard REIT Index Adm. 2% DFA US Small Value 6% DFA US Micro Cap 4% Calamos Growth 4% DFA Emerging Markets Value 4% Metlife Fixed Account (paying 3%) 20% DFA 5 Yr Gov't Bond 10% Vanguard S/T Bond Index 10% Any thought? Thanks. Garry
  6. Update: We finally went ahead and a letter went out to Valic telling them that we're moving our money to Metlife. The Valic rep has been calling us everyday to see if there is anything they can do to keep our business. We told them it's too late and they had their chances to offer us a better plan. It's amazing when they know that their going to be losing the money that they start calling you with the better things they could do for us. They should of offered us something better years ago. Garry
  7. IRA, we will not have any surrender charges with Metlife. Joel, it never made sense to me to have a tax-deferred variable annuity product in an already tax-deferred 403b plan. Also, the fund fees that Valic charges are too high. I always thought we could do better. Garry
  8. IRA, I'll try to answer some of your questions: 1) We have no surrender charges with Valic. This has been confirmed. 2) We will not be paying any other fees to Vanguard or DFA other than their fund expense fees. 3) We will be using some of Vanguard's institutional funds where possible. 4) The planner will meet with employees one-on-one to develop their retirement plans (i.e. asset allocation) and will be available during the year to do reviews. 5) I feel confident in using this planner. I called a few of his accounts that are like ours and everyone has been pleased with his and Metlife's service.
  9. Our CEO stressed that he wanted a local rep that employees can call and chat with. I spoke with Fidelity last year and they cannot offer us a local rep. We want to stick with using one vendor to make it simple for employees. If we have a falling out with the planner, Metlife will still be the custodian and will continue to service us. The planner and his staff will set-up the accounts and meet with employees individually. Metlife will also assist. I would of preferred to go with Vanguard or TIAA-CREF, but this is the best we can do at this time. I'm just glad to get rid of Valic. Garry
  10. I thought about going with a low cost vendor like Vanguard, but we need a local rep to service our account (employees asked for this), Vanguard or TIAA-CREF are not local to us. Metlife has local reps that will service our account and they don't have any hidden fees. You are correct about the DFA funds. Only certain financial planners can get offer them. I think this is a good deal for our employees and I can't wait to get it going.
  11. This is how it's going to work. The finanial planner has an agreement with Metlife for him to allow his customers to use Metlife as a custodian. Our planner favors using index funds for retirement savings and will set-up 5 different index portfolios and the employees will pick one based upon their risk tolerance level. Here's a breakdown of the expenses: Average portfolio expense will be .46%; financial planner will charge .40%; Metlife will charge .12% as the custodian. Total average fund expense for investing in one of these portfolios will be .98%. The average funds expense for investing in a Valic fund is 1.83%. We have a total of over 500 employees and over $6.5 million in assets. Hope this helps.
  12. I work for a non-for-profit company and we have had Valic as our 403b vendor since 1991. I've been pushing to get rid of them for two years and it finally has paid off. We're switching to a local investment planner to set up our accounts and were going to have access to Vanguard and DFA funds. Metlife is going to be our vendor with which investments will be made through, but the planner will monitor the plan and conduct quarterly reviews with us. Even by using the planner, it's still lower cost than if we stayed with Valic. We tried to work with Valic to lower their fees, but they wouldn't budge. So, we're going to fire them. It feels real good. Good luck to all of you who are trying to get your company to change vendors. Don't give up!
  13. We were looking at TIAA-CREF (and had them in here a few weeks ago), but my HR department needs a lot of hand holding and TIAA-CREF is located about 2 hours away. They don't have an office in town. We have gotten use to having a Valic Rep close by. HR has relied on him to do a lot of the paperwork. So, now I'm looking at vendors that are located in town, but not insurance companies. I found a regional bank that offers 403(b) plans to non-for-profits. Their plan contains all mutual funds, not annuities. Some of their fund offerings are with Fidelity, American Century and Dreyfus (good low cost companies). The bank has some administrative fees, but still a better value than Valic. And they can offer us the face-to-face customer service that the employees and HR department need. I'll keep this forum posted on future developments. Garry
  14. Joel. I've been talking with TIAA-CREF and they now offer their mutula funds as an option to add to ones 403(b) plan. They also offer other funds that can be added too: two Vanguard funds and four DFA funds. Garry
  15. I spoke with my Valic Rep. yesterday. He told me that they can't reduce their M&E fees. If they did, they wouldn't be able to continue to provide the face-to-face customer service that they give us now (he forgot to say that it would cut down on his commissions). The only thing they can offer is the Schwab PCRA account, but it would not benefit most of the employees. I know now that Valic doesn't have anything else to offer us. So, I found a large local bank that provides retirement plans that are not annuities, but mutual funds. I'm having them come in next month for a presentation. Down with Valic!
  16. It would be great if you could get your employer to change your plan and go with another vendor. Most people don't get it. People hate to make a change. I'm going through this right now with my company. It's hard to sell when people don't care about investing for retirement, but don't give up. You need to get facts and figures together and present them to your boss. It needs to show how much money this plan is costing everyone. It's best to change the whole plan, because it will benefit everyone in your company. I suggest you go to Morningstar.com and go to discussions. You can post questions there and people will respond. The best forum is Vanguard. There are very knowlegable folk there. Good Luck!
  17. I'm working to get Valic to lower their M&E fees in my company's plan. Their current fee for this expense averages .97 per fund. I don't know how much they will come down, but I'm wondering what would be reasonable. Is reducing the fee by 25% asking too much or not enough? The average fund expense in the plan right now is .81. If you add in the M&E fees, it brings it up to 1.78. I think that is too much to pay. It will be interesting to see what they come back with. Garry
  18. DC, I also have Valic and we met with their local and state Rep. I asked them if they could give me some information about their mutual fund products, they said they would and it's been about 6 weeks and I have not heard from them. I really don't think Valic cares about the people that invest with them or it could be that I'm dealing with some lousy Reps. Hopefully we are going to switch to TIAA-CREF soon. However, I'm getting some resistance from the VPs. They don't see why we need to switch. They don't think this will help the average employee. If we don't switch, maybe I can go directly to Valic's parent company and request some changes. Garry
  19. Sounds like your boss has confidence in you. That's great. TIAA-CREF is coming in Friday to do a presentation to our executive staff. I think everything looks good to move forward with the change. My CEO will have to present this to the Board for their approval, but I don't see that as a problem. We'll probably make the mover in October or November when it's open enrollment for the employees. The thing I'm wondering about is how well the transistion is going to go. I know TIAA-CREF has done this many times, but I wonder if Valic will give them or us a hard time. As far as the investment options in the plan, that will be the next thing I'm going to look at. TIAA-CREF offers 10 low cost annuity accounts as their primary investments. They also offer 9 low cost managed funds, 9 index funds, 2 Vanguard funds and 4 DFA funds if we choose to add these to our plan. DFA are very good funds that can only be purchased through select investment advisors. I don't think we should offer too many choices. I want to keep the plan as simple as possible. However, I would like to pick up the index funds. Keep us up to date on your developments. Garry
  20. Just to comment more on Valic, they should be ashmaned of themselves by offering the products they do. I honestly believe that they don't care about the people that invest with them. We're going to switch to TIAA-CREF and just to give Valic a chance to redem themselves, I had them in here about a month ago to go over our plan and to see if they had anything else to offer. Besides the portfolio director plan, they can also offer a brokerage account through Schwab for those employees who want better investment choices. But the annuall fee for this account is $50 for accounts with less than $50k and I figured that most of our employees would not use this type of account. I then asked the state Valic Rep if they could offer us some low cost index funds and he said he would look into it. Later on in the meeting he looked at me and said, "what am I supposed to get for you?" He then told me that he would send me some information. I never received it. But I'm not surprised. It's been tough getting information from these guys. Good luck John.
  21. gschech

    One Fund Family

    I think there is no risk with going with only one fund family. Fidelity is the largest mutual fund company in the country, with Vanguard coming in second. Both of these companies offer very good funds. Vanguard offers lower cost funds than Fidelity. They also offer more index fund. If you don't mind me asking, but why do you want to switch? Are you not happy with your current provider? My company is going to switch plans going from Valic to TIAA-CREF. I too checked out Fidelity and Vanguard, but both of them don't offer the one-on-one customer service that we need. We need a Rep to come in and explain the plans to employees on a regular basis. If we went with either company, our HR department would have to do more of the work and our HR dept. is not situated to do this. TIAA-CREF has an office about 1.5 hours away from my company and they do offer more of the customer service that we're looking for. Hope this helps. Garry
  22. I would think that any company must report all fund fees in their prospectuses. This is an SEC requirement. Can you get a hold of a prospectus on-line? If you can't get it from your rep, I would call his boss. If you can tell us the company name, maybe we can help. Garry
  23. It's all about lobbying and money. These insurance companies have the resources to go after the decision makers in the state capital. I believe the political folks either don't get it or don't care. Good luck in getting your company to switch vendors. Garry
  24. Galland104, I understand what you stated and we had Valic in here a few weeks ago and they put together a written synopsis of of our plan and it stated that we do not have to pay surrender charges. That could explain why the M&E fees are high (1.25%). Garry
  25. Tampa Gator, Our contract with Valic does not have the 5% surrender fee. So there are no surrender charges. Our company puts in money for each employee. Therefore, one account is set-up as an employer contribution account and if the employee makes voluntary contributions then another account is set-up as an individual account. TIAA-CREF was very helpful in explaining to us the way these things work. Valic has almost been useless for us. Good luck. Garry
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