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febarnes

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Posts posted by febarnes


  1.  

     

    I am a controller for a small private school in SF area.

    We currently have our 403 B account through Valic.

    Can someone recommend an independent consultant whom we can hire to review our current plan in terms of admin fees, and performance (it’s all annuities) , and examine other options. We don’t want a broker who sells specific investments, we want someone completely unbiased to advice the administration of the school to how provide the best possible retirement options to our teachers.

    I am very new to a non profit word, so thank you so much for your help,

    Lola

     

    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.

     

     

     

    I am a controller for a small private school in SF area.

    We currently have our 403 B account through Valic.

    Can someone recommend an independent consultant whom we can hire to review our current plan in terms of admin fees, and performance (it’s all annuities) , and examine other options. We don’t want a broker who sells specific investments, we want someone completely unbiased to advice the administration of the school to how provide the best possible retirement options to our teachers.

    I am very new to a non profit word, so thank you so much for your help,

    Lola

     

     

    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.


  2.  

    the IRS regs made reporting and plan administration too expensive or incompatablie with VG policy.

     

     

    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


  3. Hi all,

     

    We all know what happened last year with portfolios of 80% to 100% in equities. If you had too much of an equity allocation during the downturn last year and you held on for dear life, you should have been "rewarded" because your equities have grown and because you did not panic and sell at the lows. Far too many investors buy too high and sell at the lows, which is the worst decision to make. For those who panicked and sold are left out and have not benefited from the latest run-up.

     

    If you are a young investor with years to go before retirement, you can still maintain a healthy equity allocation, perhaps up to 60%-80%, DEPENDING on your tolerance and understanding for risk. All investors should have a portion in bonds so you can learn about them.

     

    For a further discussion: click here.

     

    Have a good day,

    Steve

     

    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

     


  4. I am a controller for a small private school in SF area.

    We currently have our 403 B account through Valic.

    Can someone recommend an independent consultant whom we can hire to review our current plan in terms of admin fees, and performance (it’s all annuities) , and examine other options. We don’t want a broker who sells specific investments, we want someone completely unbiased to advice the administration of the school to how provide the best possible retirement options to our teachers.

    I am very new to a non profit word, so thank you so much for your help,

    Lola

     

    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.

     

     

     

    I am a controller for a small private school in SF area.

    We currently have our 403 B account through Valic.

    Can someone recommend an independent consultant whom we can hire to review our current plan in terms of admin fees, and performance (it’s all annuities) , and examine other options. We don’t want a broker who sells specific investments, we want someone completely unbiased to advice the administration of the school to how provide the best possible retirement options to our teachers.

    I am very new to a non profit word, so thank you so much for your help,

    Lola

     

     

    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.


  5.  

     

    Why is Valic obligated to provide you with the plan document which should be available from the plan administrator, not the provider? FOIA only pertain to obtaining access to documents of government agencies, not a private corporation, such a Valic which does not want to be burdened with complying with requests from every participant.

     

    Participants in plans coverd by ERISA are entitled to receive the plan document from the plan adminstrator provided they pay a fee of $.25 per page. Tell the SD that you will pay for a copy of the plan document or post it on the internet.

     

    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.


  6.  

    I guess I just like to push the envelope.

     

     

    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.

     

     

     

     

    Why is Valic obligated to provide you with the plan document which should be available from the plan administrator, not the provider? FOIA only pertain to obtaining access to documents of government agencies, not a private corporation, such a Valic which does not want to be burdened with complying with requests from every participant.

     

    Participants in plans coverd by ERISA are entitled to receive the plan document from the plan adminstrator provided they pay a fee of $.25 per page. Tell the SD that you will pay for a copy of the plan document or post it on the internet.

     

    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.

     

     

     

     

    Why is Valic obligated to provide you with the plan document which should be available from the plan administrator, not the provider? FOIA only pertain to obtaining access to documents of government agencies, not a private corporation, such a Valic which does not want to be burdened with complying with requests from every participant.

     

    Participants in plans coverd by ERISA are entitled to receive the plan document from the plan adminstrator provided they pay a fee of $.25 per page. Tell the SD that you will pay for a copy of the plan document or post it on the internet.

     

    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.


  7.  

     

    Hi Febranes,

    Why did your school sytem dump Valic?

    thanks,

    Steve

     

    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.

     

     

    febarnes --

    Call the law firm and they will TELL you the details. In all liklihood they would appreciate having a few more plaintiffs on board, so they'll be happy to talk to you. No fear!

     

    JudyS

     

     

    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.

     

     


  8. Why is Valic obligated to provide you with the plan document which should be available from the plan administrator, not the provider? FOIA only pertain to obtaining access to documents of government agencies, not a private corporation, such a Valic which does not want to be burdened with complying with requests from every participant.

     

    Participants in plans coverd by ERISA are entitled to receive the plan document from the plan adminstrator provided they pay a fee of $.25 per page. Tell the SD that you will pay for a copy of the plan document or post it on the internet.

     

    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.


  9. Hi Febranes,

    Why did your school sytem dump Valic?

    thanks,

    Steve

     

    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.

     

     

    febarnes --

    Call the law firm and they will TELL you the details. In all liklihood they would appreciate having a few more plaintiffs on board, so they'll be happy to talk to you. No fear!

     

    JudyS

     

     

    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


  10. 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


  11. "AP, I know that you are versed in financial theory, and believe that past performance does not indicate future performance, however I sense that you feel that this fund will outperform their indexes in the future. If so, approximately what additonal expenses over an index charge would you be willing to pay."

     

    Ira,

     

    Nothing could be further from the truth! I have no faith whatsoever that American funds, or ANY funds, for that matter, will outperform indexes in the future. Given the choice between Vanguard/Fidelity index funds and American, I would take the former hands down. In fact, my money is where my mouth is: I own V/F/TRP index funds, but I do not own American at all.

     

    I merely said that American is better than most in terms of manager tenure. Fund managers do not come and go very often, and even when they do, they are only part of a larger team of managers. I simply wanted to give some credit where credit was due. This was part of a larger discussion of manager turnover at actively managed funds, which I noted was an important reason for indexing.

     

     

    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

     

     

     


  12. I will probably catch some disenting voices on this but here are some funds I would suggest.

     

    Large cap-Weitz Value, Vanguard S&P 500, Fidelity Contra Fund, Vanguard Growth Index, Fidelity Dividend Growth, Clipper Fund, American Amcap, American Washington Mutual Investors, Fidelity Puritan (Balanced Fund) Dodge& Cox Fund, Vanguard Value Index

     

    Mid-Cap-Fidelity Low Price Stock, Vanguard Capital Opportunity, Columbia Acorn Fund, Vanguard Mid Cap Index. Ariel Fund, Vanguard Selected value (columbia acorn fund which I own in z shares has beaten its index for over ten years)

     

     

    Small Cap-Vanguard Explorer, Vanguard Small Cap Value Index, Vanguard Small Cap Index

     

     

    International:Vanguard Global Equity, Vanguard Total International Index, American Capital Income, American Capital World Growth and Income, Harbor International, Dodge& Cox International, Vanguard

    International Discovery.

     

    Reitt-Vanguard Reitt Index

     

    Bond- Harbor Bond Fund, Vanguard TIPS, Vangurd Total Bond Index

     

     

     

    These are all good low risk low cost funds. The managed are a bit more expensive.

     

    This little excercise just reminds me that you guys could do just fine owning one fund family and my choice would be Vanguard.

     

    let me know what you think

     

    Tony

     

    Tony,

     

    Thanks for the list. I like many of the choices. In fact, some of them I will be submitting for consideration for our plan. I made every attempt to get Vanguard as our vendor. I called the small business manager at Vanguard to find out why there was a problem. It boils down to the record keeping, vesting schedules and loan provisions. I asked that our plan document be changed so we could get Vanguard. Unfortunatley, my plea was unsuccessful. I will continue to question and press for lower cost no matter what they are. If I am not persuaded the plan is in the best interest of the teachers, I wll not support it's adoption.

     

     

     

    Tony,

    Our system will get to choose the funds in which we invest. We can choose all institutional funds such as Vanguard or Fidelity or pick randomly from various fund families. Would you give me 20 funds of your choosing for a core lienup?

     

    I made a concerted effort to eliminate the middle man. However, because of record keeping, I was unable to do so. I made personal calls to Fidelity and Vanguard. The plan document was the problem. The costs of the plan are negotiable. The revenue sharing fees are nominal. The plan is not perfect, but it is the best one could do working with a committee of 10 people. The consultant will work with the committee to get the best possible price and lineup for our employees.

    fe

     

     

     


  13. Has the group already chosen a TPA? If so, the choice will be limited to what the TPA offers to plans of your plan's size. This can be a affected by marketing agreements with fund families, fund family size standards, etc. The problem is that open platform has no defined meaning and so is used by lots of TPAs where the choices are not entirely open.

     

    I use open only when the TPA has access to all funds traded over NSCC. This is some number above 15,000 funds, and ought to make anybody happy with the list.

     

    Tom Geer

     

    Geertom,

    No, we have two candidates.

    Both Wachovia and Lincoln have informed us that we may choose any funds we want. I believe they they will be held accountable for this statement or they will not get the business.

    I am reviewing a current proposed list by the consultant. I just wanted to get the expert advice from some veterans on this board. If I did not respect the opinions of the members of this board, I would not ask the question.

     


  14. Tony,

    Our system will get to choose the funds in which we invest. We can choose all institutional funds such as Vanguard or Fidelity or pick randomly from various fund families. Would you give me 20 funds of your choosing for a core lienup?

     

    I made a concerted effort to eliminate the middle man. However, because of record keeping, I was unable to do so. I made personal calls to Fidelity and Vanguard. The plan document was the problem. The costs of the plan are negotiable. The revenue sharing fees are nominal. The plan is not perfect, but it is the best one could do working with a committee of 10 people. The consultant will work with the committee to get the best possible price and lineup for our employees.

    fe


  15. I am not sure what your words mean. Could you define open platform and fund-line up?

     

    Tony,

    We are allowed to select specific funds of our choice as a core line-up. I made a concerted effort to eliminate the middle man, but because of record keeping issues was unable to do so. The revenue cost are minimal. We were offered all institutional funds such as Vanguard or Fidelity. In essence we get to select the funds in which we wish to invest. Could you give me 20 funds by name you would place in an investment lineup?

     

    If you are asking what I think you are asking you should push for Vanguard, Fidelity or T.Rowe Price but not

    through a middleman but directly with the companies mentioned. There is a difference because if you add any intermediary they more likely than not charge you higher fees.

     

    American Funds would also be a good choice except for the fact that you will have to deal with an intermediary and aslo pay a load so I'm not sure you would want to do that

     

     

    I think the line-up choices are pretty much decided upon by the company as to what is offered within the 403b.

     

     

    Tony

     

     

     

     

     

     

    Our school system will be leaving Valic and going to a new vendor with a mutual fund open platform. I would appreciate recommendations for the fund line-up.

     

    I also want to thank the members of this board for their insight, advice and encouragement in helping bring about a new day for the employees of my system. It has been difficult getting to this point, but the change is worth it.

    Thanks, from the bottom of my heart!!!

    Fe

     

     

     


  16. Our school system will be leaving Valic and going to a new vendor with a mutual fund open platform. I would appreciate recommendations for the fund line-up.

     

    I also want to thank the members of this board for their insight, advice and encouragement in helping bring about a new day for the employees of my system. It has been difficult getting to this point, but the change is worth it.

    Thanks, from the bottom of my heart!!!

    Fe


  17. Wow ... Fidelity or Valic? What a no brainer. It's laughable that an outfit like Valic was chosen over Fidelity.

     

    Educational value? As if Valic would really provide educational services to benefit teachers. I have a difficult time believing that Valic's educational efforts will be anything more than sales pitches.

     

    What a darned shame.

     

    Ap:

    Valic has not provided any advice to me. When I made my presentaion to the board in August, I pointed this fact out. I refuse to call them financial advisers. When I do call their clip the customer center, I simply refer to them as your rep. I have refuse to talk to any Valic rep.

     


  18. I am working with a TPA with a full array of mutual fund options and a comprehensive service offering. I'm involved in the 403(b)/457 part of the effort. I'd like to get some input on how what we do (a translated 401(k) offering) sounds to people, and what concerns we are not addressing or highlighting properly. Half the time people's eyes glaze over when we try to show them that their concerns are illusory and they can simplify their lives, get good results and worry less. Anybody interested in looking at the stuff? All comments, good and bad, are welcome.

     

    Tom Geer

     

     

    Tom:

    I am willing to study available options that benefit the contributor.

    FB

     


  19. If it's irrelevant, then why waste your time replying?

     

    It is called common courtesy in my part of the United States. You may have good intentions, but, from my perspective, which may be irrelevant to you, your people skills could use some work.

     

    I have most likely placed my job in jeoardy by speaking out in a public way. However, in order to help my colleagues and me, this was the only way. If you were an educator, you would understand the risk. So, I have no reason to attempt to deceive or make up my info. The only way my formal requests would even be considered is if I had my facts in order. Since I have been asked to be on the committee to study change, I must have some credibility with our school system based on the facts presented. Regardless of the outcome or recommendations, I will have exposed a GREAT DECEPTION that teachers will refuse to be a part of in the future. So, I have already achieved some good for myself and others like me, whose only wish was to benefit from investing their money for retirement. How dare we expect those responsible to DISCLOSE and operate in OUR BEST INTEREST! Shame on teachers for such high expectations.

     


  20. I think that saying it is not disclosed in the prospectus is not accurate. Prospectuses have to conform to NASD and SEC standards. I pulled up their document and it is clearly laid out in a nice table on pages 9-11. What is it about their expense ratios that is not not clear from this document?

     

    Besides, the questions I presented to you had nothing to do with Fidelity's fund performance. Why don't I refresh your memory since you don't seem to remember.

     

    1)Please show us how the fee structure is 6-8 times the average. The average of what? The average fee structure of Vanguard no load funds? The average expense ratio of the average retail mutual fund? The average expense ratio of the average VA subaccount?

     

    2)You say someone will be paying 7% off the top for what? What page is that in the prospectus?

     

    3)You say the salesman get no commission off the fixed account? I assume you know this because you have a copy of the employment contract with commission schedules for Valic representatives. Please show us where in their contract it says this.

     

    4)Please provide the historical returns for Valic's investments that document that an investor will never meet or exceed the rate of inflation.

     

    5)Please provide the documentation that someone will "loose" money.

     

    6)Please provide the list of teachers who have not made any money in their Valic accounts.

     

    I think if you are going to make these kind of assertions, please back them up with information. To date, I have seen none, which leads me to conclude they are not accurate.

     

    Tr:

    Your opinion or belief about my figures or presentation to our school board is IRRELEVANT. The teachers in my system know from their statements this program is in the words of Forbes magazine "a dog." However, to humor myself and those reading this post, consider the following:

     

    1. My personal account info provided to our board reveals a cost that exceeds the 1.25 average by 6 to 8 percent. Valic reps harp on the fact these investments are in mututal funds. This is partially true. They fail to tell you they are enclosed in an insurance wrapper. There is a lack of transparency and full disclosure. My agreement is from 99 and has changed ,but not in my best interest. In 99 this plan was called a cafeteria plan. Strange invesment vehicle. I have never heard of a cafeteria earning interest!!! If one is in the new program, the Portfolio Misdirected, his costs are much greater. Go to the website and read it for yourself.

     

    2. The seven percent figure is revealed when one subtracts the amount contributed as principal and the balance of the contribution goes down when it is contributed. My personal account info from Valic proves this. Just because it is not in the prospectus does not mean it does not take place.

     

    3. Unless the sales rep is not telling the truth this is the case. You make a good point about the truth. It is possible they are not telling it like it is.

     

    4. The seven year history of Valic in my school system is all that is germain to my presentation. If you want to do a historical analysis, knock yourself out.

     

    5. My personal records taken from the Valic website under personal performance prove it. The board has a copy as do other teachers.

     

    6. The right to privacy act will not allow me to provide personal info of others. I am shocked you would make such an unlawful request. However, the range of financial loss of the teachers who have discussed this with me is from 6 to 16 percent.

     

    Finally, my presentation has not been rebutted by anyone. If anything , It is worse than the known figures I provided. My response adequately answers your questions within the law. I am assuming, of course, you understand the words personal and privacy.


  21.  

     

     

    TR1982-

     

    Shame on me for what? I don't profess to think for you or anyone else in this community. You and others here have the complete right to think whatever they want. I do think that by becoming better informed about fees and expenses investors can better understand the value of different courses of action. Because numerous independent thinkers have identified variable annuity costs as outweighing the benefits, I believe 403b investors are better off in a low fee 403b7 plan than in a high fee 403b1 plan. It might show you that "the emperor has no clothes" to Google "variable annuity fees" and read through the first 20 articles posted on the web. Several of those are from the SEC and NASD.

     

    TR1982 if you've got better information, please let us know so we can embrace high fee variable annuity providers. We would like for such data to be validated by widely accepted actuarial techniques to compel us to change our views. If not, please be adult enough to admit the independent data and scholarship regarding variable annuity fees doesn't support your argument that maybe Valic is a better deal. There are variable annuity providers that charge mortality fees much lower than the 75 bp to 125 bp fees of Valic. Even then those lower fees are in addition to the underlying expense ratios of the investment vehicle.

     

    I ready to accept the value of your wisdom. What your dismissive replies have shown me so far isn't much to compel me to change my view that 403b investors are better served in low fee 403b7 plans than high fee 403b1 plans.

     

    In response to your question, I do not charge anyone for portfolio management. I manage my spouse's portfolio, my personal portfolio, and advise my parents and in-laws on their portfolios. I do not have auditable records of my portfolio's performance from the early days of my investing experience. I do know now that by using low fee (as low as 7 bp) mutual funds in tax sheltered accounts and separate term insurance policies, I am better off than if I had purchased a variable annuity product with a 200 to 300 bp total expense ratio.

     

    As a courtesy to all of the members of this community perhaps you could explain what method you use to charge for portfolio management and what metrics you use to describe the performance of your clients' portfolios. If you have a better way with variable annuities please dazzle us with independently verifiable facts. My questions to you from my earlier post remain on your table for an answer.

     

    I say again, state your case for Valic, et al, and please provide facts, not sniping, for all of us to consider.

     

    RTS

     

     

    1) My questions were not to you unless your name is febarnes or wmmcall. You seem to think that you can speak for them. Are they not able to speak for themselves? Apparently not. I am certain that if I had made those comments about Vanguard you all would be all over me for not providing any documentation. I simply ask others TO DO THE SAME.

    2) Nobody has answered any of the questions I asked. My same questions are below: If you care to answer them, please do. If not, let's move on.

    3)I simply asked others to support their lengthy, undocumented assertions about these firms. Here are the questions I asked before. I ask anyone here to answer them in a factual manner supported by evidence.

     

    "Please show us how the fee structure is 6-8 times the average. The average of what? The average fee structure of Vanguard no load funds? The average expense ratio of the average retail mutual fund? The average expense ratio of the average VA subaccount?

    You say someone will be paying 7% off the top for what? What page is that in the prospectus?

    You say the salesman get no commission off the fixed account? I assume you know this because you have a copy of the employment contract with commission schedules for Valic representatives. Please show us where in their contract it says this.

    Please provide the historical returns for Valic's investments that document that an investor will never meet or exceed the rate of inflation. Please provide the documentation that someone will "loose" money and then please provide the list of teachers who have not made any money in their Valic accounts."

     

    Tr:

    Yes, I can respond for myself. I presented to our board eight pages of data that unequivocally shows the plan as it is structured does not benefit the contributor. I provided my personal financial information as well as the Valic fee structure. I simply compared like funds to Vanguard and Fidelity. These funds trounced Valic. Furthermore, the teachers in my system are irate at the lack of full disclosure of the terms and conditions of the contract. I might add, if one thinks Valic operates in the best interest of the client, they are incredibly niave. I will be presenting this info at our association meeting on Thursday. It is open to the public.

     

     

    I'm still waiting for you to answer my questions. I guess I can take this response to mean that you can't or won't.

     

    Tr

    I used there expense ratios and compared it to my net gains. Subtract contributions from balance compute interest.

    This is a simple and easy way to reveal costs.

     

     

     

     

     

     

     

    TR1982-

     

    Shame on me for what? I don't profess to think for you or anyone else in this community. You and others here have the complete right to think whatever they want. I do think that by becoming better informed about fees and expenses investors can better understand the value of different courses of action. Because numerous independent thinkers have identified variable annuity costs as outweighing the benefits, I believe 403b investors are better off in a low fee 403b7 plan than in a high fee 403b1 plan. It might show you that "the emperor has no clothes" to Google "variable annuity fees" and read through the first 20 articles posted on the web. Several of those are from the SEC and NASD.

     

    TR1982 if you've got better information, please let us know so we can embrace high fee variable annuity providers. We would like for such data to be validated by widely accepted actuarial techniques to compel us to change our views. If not, please be adult enough to admit the independent data and scholarship regarding variable annuity fees doesn't support your argument that maybe Valic is a better deal. There are variable annuity providers that charge mortality fees much lower than the 75 bp to 125 bp fees of Valic. Even then those lower fees are in addition to the underlying expense ratios of the investment vehicle.

     

    I ready to accept the value of your wisdom. What your dismissive replies have shown me so far isn't much to compel me to change my view that 403b investors are better served in low fee 403b7 plans than high fee 403b1 plans.

     

    In response to your question, I do not charge anyone for portfolio management. I manage my spouse's portfolio, my personal portfolio, and advise my parents and in-laws on their portfolios. I do not have auditable records of my portfolio's performance from the early days of my investing experience. I do know now that by using low fee (as low as 7 bp) mutual funds in tax sheltered accounts and separate term insurance policies, I am better off than if I had purchased a variable annuity product with a 200 to 300 bp total expense ratio.

     

    As a courtesy to all of the members of this community perhaps you could explain what method you use to charge for portfolio management and what metrics you use to describe the performance of your clients' portfolios. If you have a better way with variable annuities please dazzle us with independently verifiable facts. My questions to you from my earlier post remain on your table for an answer.

     

    I say again, state your case for Valic, et al, and please provide facts, not sniping, for all of us to consider.

     

    RTS

     

     

    1) My questions were not to you unless your name is febarnes or wmmcall. You seem to think that you can speak for them. Are they not able to speak for themselves? Apparently not. I am certain that if I had made those comments about Vanguard you all would be all over me for not providing any documentation. I simply ask others TO DO THE SAME.

    2) Nobody has answered any of the questions I asked. My same questions are below: If you care to answer them, please do. If not, let's move on.

    3)I simply asked others to support their lengthy, undocumented assertions about these firms. Here are the questions I asked before. I ask anyone here to answer them in a factual manner supported by evidence.

     

    "Please show us how the fee structure is 6-8 times the average. The average of what? The average fee structure of Vanguard no load funds? The average expense ratio of the average retail mutual fund? The average expense ratio of the average VA subaccount?

    You say someone will be paying 7% off the top for what? What page is that in the prospectus?

    You say the salesman get no commission off the fixed account? I assume you know this because you have a copy of the employment contract with commission schedules for Valic representatives. Please show us where in their contract it says this.

    Please provide the historical returns for Valic's investments that document that an investor will never meet or exceed the rate of inflation. Please provide the documentation that someone will "loose" money and then please provide the list of teachers who have not made any money in their Valic accounts."

     

    Tr:

    Yes, I can respond for myself. I presented to our board eight pages of data that unequivocally shows the plan as it is structured does not benefit the contributor. I provided my personal financial information as well as the Valic fee structure. I simply compared like funds to Vanguard and Fidelity. These funds trounced Valic. Furthermore, the teachers in my system are irate at the lack of full disclosure of the terms and conditions of the contract. I might add, if one thinks Valic operates in the best interest of the client, they are incredibly niave. I will be presenting this info at our association meeting on Thursday. It is open to the public.

     

     

    I'm still waiting for you to answer my questions. I guess I can take this response to mean that you can't or won't.

     

    Tr

    I used there expense ratios and compared it to my net gains. Subtract contributions from balance compute interest.

    This is a simple and easy way to reveal costs.

     

     

    That is the point it is not FULLY DISCLOSED IN PROSPECTUS. see PREVIOUS ANSWER

     

     


  22. You are preaching to the choir apteacher. Having read many articles and forum posts on this site over the past couple of years (along with Dan's book), I realized that, in my misguided early years as a teacher, I had made just about every investing mistake possible. A teacher at my high school was a "part time" agent for MANY companies that offered TSA's through our district and he got many of us involved with saving for retirement. This was a GOOD thing from the standpoint that many young teachers don't even bother to think about the value of investing early on in one's teaching career. Unfortunately, I would learn much later, he was signing everyone up for products that paid HIM significant commissions (and we all know who really pays for those commissions now don't we). My first company was Jackson National Life where I contributed to a TSA AND purchased a life insurance policy with a "vanishing premium" (don't ask me what I was thinking when I was 24 years old). The very next year this teacher/agent had found a "fantastic" product....a double-tiered TSA (GALIC) that would pay a "bonus" of 3% if you met certain criteria at the end of 10 years. Of course I stopped contributing to Jackson National and signed up for the GALIC double-tiered TSA. Many other teachers did the same earning our fellow teacher/agent some nice $$$. A few years later this same agent returned with some other great ideas. It was at this point I realized what was going on. The agent couldn't make any real money unless his customers (teachers) were constantly signing up for new products with new companies. His main mistake was not realizing that all of us had bought into this 10 year double tiered B.S. he had sold us so we knew we needed to keep contributing to it in order to get our 3% bonus at the end of a decade. Needless to say I just continued to contribute to my GALIC double-tiered TSA for the next few years. I ended up leaving that school district to go teach at a local community college and was (initially) horrified that they didn't have GALIC as one of their vendors. I was 6 or 7 years into my 10 year plan and could no longer contribute (there went that 3% bonus!). Out of frustration I signed up with VALIC upon starting the community college because it was most convenient (you know....the agent dropped by my office and had all the paperwork I needed etc.). Fortunately, after two years , I made it a point to finally educate myself on 403(b) retirement accounts and found out what a mess I was in. I "fired" VALIC and started to contribute to a Fidelity account (fortunately my community college had Fidelity as a vendor) that I set up for myself through a 1-800 number. I transferred my GALIC money (at the end of 10 years...the surrender period...without of course my 3% bonus) to Fidelity and did the same with my Jackson National and VALIC money (except of course for the Fixed Account Plus money). I never bothered to go back and figure out how poorly my money had done for 10 years with GALIC in that double-tiered TSA...the medication for the depression that I would have gone into would have been too expensive. I am VERY pleased NOW with Fidelity and my wife (who works in a K-12 district) has taken her money out of VALIC and now has a Vanguard account.

     

    By the way....What was I thinking taking financial advice from a "part time" agent? Have any of you ever had dental work done by a "part time" dentist?

     

     

     

    Samson,

     

    It makes a person wonder just whose money it is, doesn't it?

     

    VALIC, GALIC ... what pathetic products they offer.

     

     

    Samson:

    According to my contract, when I am terminated or discontinue service, my money is transferable. If this five year rule exists in our contract it is unwritten. My understanding is when the current contract is up in December all assets will be transferable, as Valic will no longer be an approved vendor.

    There are no surrender fees with our contract.

    FB

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