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febarnes

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  1. I would like to see a cost comparison for costs for 403b plans by the following: Vanguard, Fidelity Direct, Creff, Valic, and Lincoln Financial. This info would open the eyes of all sheep who are being fleeced.
  2. Lola. I am a member of our school system's 403 B committee. An " independent consultant" was hired. I did not like the product produced by his participation in the process. Vanguard was willing to be our vendor. However, the powers that be did not want to use them and their erisa plan. This excuse does not hold water. Vanguard has 403 B plans in all 50 states. The real problem is not with Vanguard, but with the buddy relationship schools have with these asinine insurance companies. Yes, it is a bold statement. However, anyone who can do basic math knows Vanguard would be a better deal than most others. Why would a school system choose a more expensive option? I will let you think about that one. I have an answer, but will not reveal it at this time. I personally spoke with the manager of the small business division at Vanguard and he told me the hold up was with the school system, not with Vanguard. There are some posters on this board who continue to be totally oblivious to the realities of what options are available for 403b plans of small non profit organizations due to the new regulatory environment effective in 2009. Small non profit organizations are unlikely to attract low cost mutual funds such as VG or TIAA-CREF who have withdrawn from the the small plan market due to the cost of complying with the new IRS 403b regs that were effective January 1. Insurance companies are available because they offer the necessary administrative services by charging higher fees and may provide a plan document. If your non profit organization provides for employer contributions in addition to employee contributions then the plan will be subject to ERISA and the expenses will increase because of the new annual reporting requirements that take effect this year as well as the compliance requirements for plans regulated by the US Department of Labor. Also all employers are required to adopt a 403b plan document that conforms to the IRS regulations no later than December 31, 2009 which will require that you retain counsel. As for hiring a consultant have you checked with other NPs in your area to see if they have a reference? You might also want to check benefitslink.com to see if you can find such a person in their service provider index. Intruder, The expense excuse is not accurate. I personally spoke with the small business manger at Vanguard. They would have liked to have become our vendor. However, it was the school system that wanted things that the I.R.S. DID NOT require. I was told this directly as I pressed the issue. The real question or issue is why would a school system choose a more expensive option when a low cost provider that meets erisa standards is available? By the way, Vanguard has 403 B plans in all 50 states. There seems to be an unhealthy relationship between schools and these sorry insurance companies. FE: You have to ask the SD(school district) for the specific reasons it rejected VG but how about the SD rejecting VG because SD are not subject to ERISA and it would be impermissible for the SD to adopt a plan containing ERISA provisions. The SD board as the fiduciaries for the plan have a duty to provide a plan that suits the needs of all particpants and complies with applicable state laws as well as meet the requirements under the 403b regs. However, the IRS regs do not have any authority over the SD's responsibility to make sure that participants are informed investors which may require investment education and enrollment meetings. Because of its low cost structure VG does not send out represeatives to conduct investment education or enrollment meetings which many plan fiducaries deem necessary for plan administration. Also VG prefers to conduct all of its operations over internet and limit transfers and contributons to wire transactions which is not an option for many SDs. VG may not be willing to provide the SD with a plan document which now required under the 403b regs. As for ERISA plans there are significant expenses that 403b plans will incur in preparing 5500 reports beginning with 2009 and plans using VG will have increased expenses because VG can only provide the information in a format that will require that the accountants for the sponsor do additional work to convert the information to a format that can be submitted on the 5500 to the DOL. Plan administrators prefer another provider that will generate lower expenses for filing the 5500. I appreciate your post. I also have heard this before. Vanguard has better online investment education than I ever received form Valic or Lincoln. Whom actually would trust their investment dollars to an insurance agent? What a travesty this is for schools. This is legalized fleecing.
  3. Our 457 plan has 3 VG funds which are the cheapest choices (under 60 bps). Its not impossible to have VG and have VALIC as the administrator. But thats the 457. IMO, the 403b is totally flawed and unfixable for the moment. Yesteryear, it was the outrageous hold harmless agreements demanded of low fee custodial accounts with mutual fund companies by SDs and now its the outrageous high fees and reporting demanded by the IRS with the full support of the insurance industry. They are laughing all the way to the bank. Steve, We have 4 quality funds in our plan. A VG, 2 American funds and a Barron's fund. We have an agreement with our vendor to change our lineup at our discretion. This is one thing I like about our plan. However, it is still too expensive. I will be approaching our new super about the expense ratios. By the way, I appreciate your due dilligence on this board. Frank
  4. Steve, I am still down some. However, Had I not moved money one day too soon. I would be treading water. By the way, the bulk of my money is in Rerex, Rgaex, Bgrfx. Thanks for all you do! Frank
  5. Lola. I am a member of our school system's 403 B committee. An " independent consultant" was hired. I did not like the product produced by his participation in the process. Vanguard was willing to be our vendor. However, the powers that be did not want to use them and their erisa plan. This excuse does not hold water. Vanguard has 403 B plans in all 50 states. The real problem is not with Vanguard, but with the buddy relationship schools have with these asinine insurance companies. Yes, it is a bold statement. However, anyone who can do basic math knows Vanguard would be a better deal than most others. Why would a school system choose a more expensive option? I will let you think about that one. I have an answer, but will not reveal it at this time. I personally spoke with the manager of the small business division at Vanguard and he told me the hold up was with the school system, not with Vanguard. There are some posters on this board who continue to be totally oblivious to the realities of what options are available for 403b plans of small non profit organizations due to the new regulatory environment effective in 2009. Small non profit organizations are unlikely to attract low cost mutual funds such as VG or TIAA-CREF who have withdrawn from the the small plan market due to the cost of complying with the new IRS 403b regs that were effective January 1. Insurance companies are available because they offer the necessary administrative services by charging higher fees and may provide a plan document. If your non profit organization provides for employer contributions in addition to employee contributions then the plan will be subject to ERISA and the expenses will increase because of the new annual reporting requirements that take effect this year as well as the compliance requirements for plans regulated by the US Department of Labor. Also all employers are required to adopt a 403b plan document that conforms to the IRS regulations no later than December 31, 2009 which will require that you retain counsel. As for hiring a consultant have you checked with other NPs in your area to see if they have a reference? You might also want to check benefitslink.com to see if you can find such a person in their service provider index. Intruder, The expense excuse is not accurate. I personally spoke with the small business manger at Vanguard. They would have liked to have become our vendor. However, it was the school system that wanted things that the I.R.S. DID NOT require. I was told this directly as I pressed the issue. The real question or issue is why would a school system choose a more expensive option when a low cost provider that meets erisa standards is available? By the way, Vanguard has 403 B plans in all 50 states. There seems to be an unhealthy relationship between schools and these sorry insurance companies.
  6. The plan document did fall under the foia as public tax dollar match is provided by the system. The system provided the original document. Valic should have provided the document as a part of full disclosure which is covered by the S.E.C. I talked to an agent with the S.E.C. and considered filling a complaint. However, when the system agreed to a change of vendors, I chose to spend my time finding a new vendor. I did not get the ones I wanted ( Vanguard, Fidelity, Creff) what I wanted, but it was an improvement. If you got the plan document from the system what are you complaining about? The SEC agent misinfomed you (which is to be expected since the SEC does not regulate disclosure required under retirement plans and knows even less about securites regulation - for 20 years SEC could not figure out that Bernie Madoff was acting as an investment advisor instead of as a broker even though he was invesitgated 9 times). As stated previously plan documents are the responsibility of the plan sponsor since VALIC would not be responsible for adopting and amending the plan document. The only disclosure required of VALIC is the prospectus/disclosure of its investment product. The vendors you desire have withdrawn from the voluntary 403b market place because the cost of compliance with the IRS regs is not worth the effort. Intruder, I have a 403 B with Vanguard. They are still in the 403 B business. Just read it on their website.
  7. Whom does your system use as it's 403B provider? Are you satisfied with them?
  8. febarnes, It took years to convince my teachers union to either approve of a low cost option for the "union approved" 403b vendor or just don't use the outdated system. About a year ago, they terminated the union approved system. It takes time but the "pushing the envelope" strategy eventually works. It works because you and I are doing the right thing and SD, unions and agents for the most part are doing the unethical thing. This example is an exaggeration but Ghandi said that "tyranny never ever works" for the long term. Unethical behavior never lasts either. Have a great weekend, Steve I appreciate your encouragement. It has been a lonely journey at times. I was told don't buck the system. Others looked at me with you are living dangerously close to termination. I am thankful my board was willing to listen. Insurance companies are not near the top of my to be loathed list. The plan document did fall under the foia as public tax dollar match is provided by the system. The system provided the original document. Valic should have provided the document as a part of full disclosure which is covered by the S.E.C. I talked to an agent with the S.E.C. and considered filling a complaint. However, when the system agreed to a change of vendors, I chose to spend my time finding a new vendor. I did not get the ones I wanted ( Vanguard, Fidelity, Creff) what I wanted, but it was an improvement. If you got the plan document from the system what are you complaining about? The SEC agent misinfomed you (which is to be expected since the SEC does not regulate disclosure required under retirement plans and knows even less about securites regulation - for 20 years SEC could not figure out that Bernie Madoff was acting as an investment advisor instead of as a broker even though he was invesitgated 9 times). As stated previously plan documents are the responsibility of the plan sponsor since VALIC would not be responsible for adopting and amending the plan document. The only disclosure required of VALIC is the prospectus/disclosure of its investment product. The vendors you desire have withdrawn from the voluntary 403b market place because the cost of compliance with the IRS regs is not worth the effort. If you will read my previous post, you will see that the board sent me the original document. It required about six weeks to get it. I can only believe what I was told by the S.E.C. I was told Valic had an obligation of full disclosure and a fiduciary trust. This is required because my money was invested in mutual funds. This falls under their umbrella. Just because they failed to do their job in regards to Madoff does not necessitate the abdication of duty to those they are supposed to protect. The plan document did fall under the foia as public tax dollar match is provided by the system. The system provided the original document. Valic should have provided the document as a part of full disclosure which is covered by the S.E.C. I talked to an agent with the S.E.C. and considered filling a complaint. However, when the system agreed to a change of vendors, I chose to spend my time finding a new vendor. I did not get the ones I wanted ( Vanguard, Fidelity, Creff) what I wanted, but it was an improvement. If you got the plan document from the system what are you complaining about? The SEC agent misinfomed you (which is to be expected since the SEC does not regulate disclosure required under retirement plans and knows even less about securites regulation - for 20 years SEC could not figure out that Bernie Madoff was acting as an investment advisor instead of as a broker even though he was invesitgated 9 times). As stated previously plan documents are the responsibility of the plan sponsor since VALIC would not be responsible for adopting and amending the plan document. The only disclosure required of VALIC is the prospectus/disclosure of its investment product. The vendors you desire have withdrawn from the voluntary 403b market place because the cost of compliance with the IRS regs is not worth the effort. If you will read my previous post, you will see that the board sent me the original document. It required about six weeks to get it. I can only believe what I was told by the S.E.C. I was told Valic had an obligation of full disclosure and a fiduciary trust. This is required because my money was invested in mutual funds. This falls under their umbrella. Just because they failed to do their job in regards to Madoff does not necessitate the abdication of duty to those they are supposed to protect.
  9. Steve I personally researched my account and found the balance did not correlate with fees and expenses. Valic violates both full disclosure and fiduciary trust. I personally appeared before our school board to have them removed. I requested the original plan document from Valic. They never gave it to me. I made the request under the freedom of info act. They blatantly disregarded my written request. I have no respect for AIG/Valic. Some of the teachers at my school had entertained ideas of filling a class action suit against them. However, since getting rid of them, that talk has died. My one regret is I allowed some 5 years to pass before taking action. Judy, I like your attitude. I presented 12 pages of summary material related to Valic to our board. I had five minutes to present and make a formal request. I did this without anyone attending the meeting with me. I cannot believe this is not a common and persistent problem with Valic. It bothers me to see teachers of my children violated by a group such as Valic. FeBarnes Good work FeBarnes! The more you keep VALIC away from teachers the better. It doesn't surprise me one bit that VALIC would withhold documents even though they are required under the ERISA regs to present them when requested. They will do anything for their bottom line. We have a similar situation at my SD. Best wishes, Steve I am still incensed they are allowed to operate in Georgia's schools. Superintendents and Boards should wake up. I may join the class action suit if it is adjudicated. I spent 6 months working after hours to find out the scam. I do not know how their agents sleep at night. We are getting a new Super. I may approach him about adding Vanguard, Fidelity and Creff to our plan. However, there will be resistance. I guess I just like to push the envelope.
  10. The plan document did fall under the foia as public tax dollar match is provided by the system. The system provided the original document. Valic should have provided the document as a part of full disclosure which is covered by the S.E.C. I talked to an agent with the S.E.C. and considered filling a complaint. However, when the system agreed to a change of vendors, I chose to spend my time finding a new vendor. I did not get the ones I wanted ( Vanguard, Fidelity, Creff) what I wanted, but it was an improvement.
  11. Steve I personally researched my account and found the balance did not correlate with fees and expenses. Valic violates both full disclosure and fiduciary trust. I personally appeared before our school board to have them removed. I requested the original plan document from Valic. They never gave it to me. I made the request under the freedom of info act. They blatantly disregarded my written request. I have no respect for AIG/Valic. Some of the teachers at my school had entertained ideas of filling a class action suit against them. However, since getting rid of them, that talk has died. My one regret is I allowed some 5 years to pass before taking action. Judy, I like your attitude. I presented 12 pages of summary material related to Valic to our board. I had five minutes to present and make a formal request. I did this without anyone attending the meeting with me. I cannot believe this is not a common and persistent problem with Valic. It bothers me to see teachers of my children violated by a group such as Valic. FeBarnes
  12. I recently saw an ad for the James Sokolove law firm. The ad offered a free consultation for a potential lawsuit against VALIC. Does anyone know the details about this potential action? By the way, my school system has dumped Valic as our vendor. Thanks for a response. Febarnes
  13. Our system no longer uses Valic. There days are numbered in schools. Be sure your sins will find you out. I simply do not believe anything there reps say. There is no fiduciary trust with them. That is a joke!!!
  14. To All, It has taken about nine months to get Valic out of our system. However, my ultimate goal is a direct relationship with a low cost vendor. I have not achieved that goal. However, If I am not satisfied with the new vendor, I will petition the board, again. My experience working with a consultant in the procurement process has been eye opening. If I had the power, my system would not use one. The consultant is not a stakeholder of interest in our system. Therefore, he could care less about who gets the business, as long as he gets paid. The process is stacked against the low cost companies. Companies like Fidelity and Vanguard have reputations to uphold and do not want to promise that which they cannot deliver. The bottom feeders do not care. I asked the C.F.P. from one of the competing companies, What percentage in fees or costs is reasonable to pay for an investment? He never gave me a response. This is the type deceit that makes me sick. I say all of this to let each one of you know the encouragement and strength I have received by hearing of the struggles of others on this board. I want to commend all of you for the tremendous job you do in helping teachers get a fair shake in the investment world. Fe
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