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krow36

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Everything posted by krow36

  1. I listened to Dan Otter and Scot D.'s podcast recently and it goes over Aspire's fee setup, with lots of other info. http://teachandretirerich.com/podcasts/2015_11_aspire.m4a I think you pay $40/yr, half of which goes to Aspire and the rest goes to the Third Party Administrator. If the TPA charges more than $20, you would pay the rest. You also pay 0.15%/yr to Aspire and whatever the mutual fund's expense ratio is.
  2. The author compares the fee of the average CIT (collective investment trusts) of 0.53% with the average fee of mutual funds of 0.97%. He claims this 0.44% difference justifies 403b's replacing mutual funds with CIT’s. How about comparing CIT fees with the average fee of broad-based index funds (0.1 to 0.2%)? He wants to replace high fee products with a moderate fee product, when a low fee product already exists. What little regulation the SEC does on mutual funds should be increased, not eliminated. Advocating for unregulated CIT’s to replace mutual funds in 403b’s is like trying to replace mutual funds with hedge funds into 403b programs. No thanks! It’s ridiculous the author wants to improve 403b’s and doesn’t mention the insurance industry’s firm grip? It seems to me that his agenda is something other than improving today’s 403b scene.
  3. Hi Steve, “A little defensive?” I think maybe you are seeing my frustration. On both this and the BH forum, I’ve asked for discussion, comments on, and most important, input from anyone who has used the the NEA Direct Invest 403b. I guess I’m disappointed that I haven’t been able to stir up more discussion, information and a long term user. This certainly is not your fault. You've helped by contributing to several threads on the subject. Like you, I think we need to find someone who has used the program for a year or more and who can confirm that the fees are only those stated by SB in their Custodial Agreement. I keep hoping that the long term user will notice the topic in the forums, and join in, but no luck so far. "Are you okay that I am not sold on this until somebody uses it and reports that the fees are what they publicize? Just providing what SB says online is not enough evidence for me.” Sure, I understand your reluctance to endorse it without the numbers that show it’s as good as it looks on the surface. "Since the plan was launched almost ten years ago, nobody besides you has reported on this forum about NEA SB direct invest plan.” That’s not quite the case. Here’s what I’ve been able to find about users of NEA Direct Invest. Granted, it’s not much. April 2012, dc9husker, on the 457b forum here, used the NEA Direct Invest 403b to contribute to TR funds from TRPrice. Complains of lack of a low cost index fund provider. I’ve sent dc9husker a PM, but no reply. http://board.403bwise.com/index.php?showtopic=5444&hl=%2Bsecurity+%2Bbenefit Aug 2015, Daniel1973 In a BH post indicated he has started using NEA Direct Invest. "My wife has had a 403b option, but we only just started contributing to it and we are currently contributing $200/month. $200 balance 60% Spartan Total Market Index Fund - FSTVX - 0.07% Expense Ratio 30% Spartan Global ex US Index Fund - FSGDX - 0.28% Expense Ratio 10% Spartan US Bond index Fund - FSITX - 0.17% Expense Ratio ”It looks like there are some Mutual Fund Custodial options under the Security Benefit Group products, there is an NEA Directinvest option. Under that option, there appear to be some options, (click on "Daily Performance") such as: -American Century Equity Growth (ER 0.67%) -Dreyfus S&P 500 Index (ER 0.50%) -Dreyfus International Stock Index (ER 0.60%) -PIMCO Total Return (ER 0.71%) This is some type of Intermediate Term Bond Fund?” It looks like the Spartan funds available in Aug 2015 have been replaced by Vanguard Admiral funds by Dec2015. The 4 other funds mentioned remain. I’ve sent Daniel1973 a PM, but no reply. https://www.bogleheads.org/forum/viewtopic.php?f=1&t=172713&p=2604707#p2604707 edit on Mar 9, 2016: Daniel1973 has posted that he was not using NEA Direct Invest for the Fidelity funds. His reference to the funds in NEA Direct Invest seems to indicate it included no Vanguard funds in Aug 2015. Dec 9, 2015, corysold, asked “…. can there be other fees other than those listed below? If so, how would I go about finding out what they are?" Steve, your answer to corysold certainly make sense to me. corysold went ahead and used Direct Invest, starting in Jan this year. http://board.403bwise.com/index.php?showtopic=6061 Dec 10, 2015 corysold asked on BH forum for info on the NEA Direct Invest. This is the first I had heard of it. https://www.bogleheads.org/forum/viewtopic.php?f=1&t=179286 Dec 26, 2015 I posted about the NEA Direct Invest 403b in the hopes of finding a long term user, but no luck so far. It was great to see Steve, Dan and others join in with posts. https://www.bogleheads.org/forum/viewtopic.php?f=2&t=180418 Dec 31, 2015 PEteacher asked this forum about NEA Direct Invest and also Aspire. Steve, Dan and I responded, and PEteacher probably went with Aspire. I’ve listened to your podcast on Aspire (thanks for them--I've learned a lot!), and Aspire seems like a very good way to go. http://board.403bwise.com/index.php?showtopic=6072 Feb 15, 2016 griffeyfan04 has turned in the papers to the SB rep. Chose VG TSM and TISM. https://www.bogleheads.org/forum/viewtopic.php?f=1&t=184752 Mar 16, 2016 griffeyfan04 “We are going this route as well for my wife through NEA/Direct Invest via security benefit because of the offer of Vanguard funds. It has been a lengthy process so be forewarned. They are not exactly in a big hurry to help you. A little complicated filling the forms out and sending it to them but maybe after the ease of dealing with Fidelity I am a little biased. Not saying if they are good or bad just has taken longer than I thought lol" https://www.bogleheads.org/forum/viewtopic.php?f=1&t=186962 When teachers come to the forums with nothing but insurance company 403b and no 457b available, we can direct them to the SB website for a look. But we should warn them that we don't have a year or more's proof that Direct Invest is as good as it appears on the SB's website. Does anyone have an idea on how to make contact with a long term user of NEA Direct Invest? krow36
  4. Sorry for not being clear about what I'm asking. Have you looked at the NEA Direct Invest 403b closely enough to decide whether you could recommend it to a teacher with only expensive annuity type 403b providers? Or has the fact that NEA has sold out completely in the past to SB, too outrageous to even consider this option? You are much more experienced with crappy insurance-based 403b's than I am. Is the smell of both NEA and SB repelling you so much that you rule out the Direct Invest 403b? On the BH forum, there are teachers (often teacher's spouses because the teacher doesn't have the time!) asking for help. Their district's list of providers has only insurance companies, but Security Benefit is included in the list. I've been suggesting that they consider the NEA Direct Invest 403b. Am I making a mistake?
  5. I’ve been tacking this topic on to other threads, and I’d like to give it a thread of its own. Security Benefit is reported to pay NEA millions a year to put the NEA logo on two SB 403b products: NEA Valuebuilder 403b7 with Options 1, 2 and 3 NEA Valuebuilder 403b7 Direct Invest The first 403b with 3 with options is an expensive product with loads and high ERs. The Direct Invest 403b is a very interesting product for an insurance/annuity 403b provider to offer. Direct Invest offers about 30 funds from various providers, most of which have ER’s of about 0.50 to 1.00% and are managed funds. Among the 30 funds are 8 Vanguard Admiral class index funds. The complete list of funds available in the Direct Invest 403b are found at “Product Performance”. http://www.nearetirementprogram.com/#!enrollment/cc0q The 8 Admiral class Vanguard funds: Vanguard Total Stock Market Index ER 0.05% Vanguard Total International Stock Index ER 0.14% Vanguard Intermediate Term Bond Index ER 0.10% Vanguard 500 Index ER 0.05% Vanguard Growth Index ER 0.09% Vanguard Mid Cap Index ER 0.09% Vanguard Small Cap Index ER 0.09% Vanguard REIT Index ER 0.12% There is a 12b-1 fee of 0.01%, which is probably in addition to the ER’s. The fees listed in the "Security Benefit Custodial Agreement" (Section ######.) seem reasonable:An annual fee of $35 for accounts of less than $50,000. A annual fee of $30 if the employee revokes their agreement to receive all communications by mail instead of electronically. A $25 withdrawal fee for any withdrawal not requested through the employee’s online account. There doesn’t seem to be a published explanation for why this insurance company is now offering what looks like an excellent 403b. In 2006 a lawsuit was brought against SB and NEA complaining about the high priced annuity type 403b product a WA couple had been sold. This lawsuit got a lot of press, and although the suit was dismissed in 2010, it was not the kind of publicity that SB and NEA wanted. In 2012, poster dc9husker on the 457 forum was using the Direct Invest 403b but no low cost index funds were included. In 2015, BH and 403bwise poster corysold brought the forums' attention to the Vanguard funds. So SB, NEA and Vanguard have worked out a very interesting arrangement. Vanguard doesn’t offer Admiral class funds in their own 403b. It seems likely that NEA is subsidizing the Direct Invest 403b, maybe with some of the millions they receive from SB? In districts where no providers offer a low cost 403b (and a 457b is not available), I think we should discuss why the NEA Direct Invest 403b should not be looked on favorably. edit: In districts where no providers offer a low cost 403b (and a 457b is not available), should the NEA Direct Invest 403b be looked on favorably?
  6. If teachers are currently using Security Benefit's annuity type NEA 403b with its load funds in a district that refuses to add a low cost provider, a good case can be made for their moving to SB's NEA/Direct Invest 403b. That would mean they would give up the "services" of the SB rep and be willing to manage their 403b over the Internet. Some will choose "hand holding" over low cost investing, but I think there's an opportunity here. SB seems to turn up frequently on school districts' list of providers. That's not surprising in that SB is paying NEA millions of $$ for the NEA “endorsement” of the 2 programs. There must be a very large number of teachers using the SB annuity 403b who would be MUCH better off with the Direct Invest 403b. I'm a retired teacher but when I was teaching, I did not have the time or energy (or knowledge) to lobby for a better 403b. Teachers able and willing to become activists working for a better 403b are the exception. However, teachers with the crappy SB annuity based 403b are NOT the exception. To me this looks like an opportunity to make progress in getting low cost investing out to more educators in poorly served school districts. If more teachers were using low cost Vanguard index funds in Direct Invest, there might be increased pressure on all districts and states to provide low cost index choices in their 403b’s (and 457b’s).
  7. I think your explanation is the only one that makes sense. Security Benefit pays NEA millions for the privilege of attaching “NEA” to their annuity type products. The lawsuit in 2007 generated a lot of bad publicity for NEA and for SB (and for insurance type 403b’s in general). No doubt press coverage of the suit, especially the NYT article, was a problem for both NEA and SB. The lawsuit was dismissed in 2010. In April, 2012, dc9husker posted here complaining about having TR Price but not having Vanguard in SB Direct Invest. I’ve sent dc9husker a PM asking for an update. That’s the earliest reference I can find for Direct Invest. Sometime after that, the 8 Vanguard Admiral funds were added. Here's the dc9husker thread: http://board.403bwise.com/index.php?showtopic=5444&hl=%2Bsecurity+%2Bbenefit
  8. I am still trying to find someone who has used the Security Benefit NEA/Direct Invest 403b. This thread from 2012 doesn’t mention the Direct Invest option, so it must have been started afterwards. I haven’t been able to find out when it started. Included with about 30 funds with higher expense ratios offered by various companies are 8 Vanguard Admiral class index funds. The other funds in the program are mostly managed funds, all with ER’s of about 0.50 to 1.00%. The complete list of funds available in the Direct Invest 403b are found at “Product Performance”. http://www.nearetirementprogram.com/#!enrollment/cc0q The 8 Admiral class Vanguard funds: Vanguard Total Stock Market Index ER 0.05% Vanguard Total International Stock Index ER 0.14% Vanguard Intermediate Term Bond Index ER 0.10% Vanguard 500 Index ER 0.05% Vanguard Growth Index ER 0.09% Vanguard Mid Cap Index ER 0.09% Vanguard Small Cap Index ER 0.09% Vanguard REIT Index ER 0.12% Although the funds all have a 12b-1 fee of 0.01%, I think that it is included in the ER, but I’m not sure. The fees listed in the "Security Benefit Custodial Agreement" (Section ) seem reasonable:An annual fee of $35 for accounts of less than $50,000. A annual fee of $30 if the employee revokes their agreement to receive all communications by mail instead of electronically. A $25 withdrawal fee for any withdrawal not requested through the employee’s online account. Those fees are very different from those of the other Security Benefit NEA 403b that you are criticizing aren’t they? Since 403bwise is where teachers and others go for 403b info, I think you want to be up to date on the SB NEA Direct Invest 403(b)(7). I understand that Steve, Dan, Tony, Joel and others on this forum are pushing for major reforms and improvements in teacher’s 403b’s, and this option does not fix the basic problems. But it does seem to be a work-around for where the district doesn’t offer a 403b with inexpensive index funds, and cannot be convinced to do so. Which is better, investing in a taxable account because there isn’t a 403b worth using, or contributing to the SB Direct Invest?
  9. In Jan 2013, Joel L Frank posted the following in the 457b forum. "On or about July 1, 2013 the list of participating employers [in the NJ ACTS 403b plan] will grow by about 600 when the State's school districts will be added. This is great news for the vast majority of New Jersey public educators---the public school teachers of New Jersey." http://board.403bwise.com/index.php?showtopic=5585&do=findComment&comment=30725 The current ACTS website indicates that this 403b program is not an option for K-12 teachers. "Employees of county colleges, state universities and colleges, the Commission on Higher Education, the Department of Education, and the Office of Student Assistance are eligible to participate in the ACTS Program." http://www.state.nj.us/treasury/pensions/acts.shtml What's the story here? The TIAA/CREF option would have been a big improvement over the usual expensive insurance 403b providers available to NJ teachers wouldn’t it? The one NJ state 403b program that seems to be open to K-12 teachers is the SACT. On a Bogglehead thread, NJ teacher mikew041 asked for help finding a 403b that was worth using: https://www.bogleheads.org/forum/viewtopic.php?f=1&t=179734 I compared the SACT annual performance using their unit values with the performance of Vanguard’s Life Strategy Moderate Growth (60/40). SACT.------SACT ——LSMG 2012——— 8.27%—— 11.76% 2011——— 1.71——— 0.26 2010——— 13.01—— 13.31 2009——— 14.86—— 20.33 2008***** -34.13*** -26.50 2007——— 0.33—— 7.36 2006——— 11.85—— 13.31 2005——— 4.35—— 5.69 2004——— 8.21—— 10.57 2003——— 23.56—— 22.40 2002******** -27.47** -10.32 2001******** -12.04** -4.48 http://www.state.nj.us/treasury/deferred/sact.shtml https://personal.vanguard.com/us/funds/snaps?FundIntExt=INT&FundId=0914#tab=1a In 10 out of 12 years, SACT significantly underperformed LSMG. I couldn’t find any discussion of SACT’s expenses but I’m guessing there’s an expense drag of more than 1%. Not a very impressive showing of the NJ Dept. of Treasury, is it?
  10. Steve, I'm a retired teacher who had an expensive VALIC 403b decades ago. I've been trying to help out on the BH forum and when corysold posted about the NEA Direct Invest 403b, it seemed worth a closer look. As neither 403bwise or the BH forums seem to be familiar with it, I decided to try and find educators that had used the program. It seemed ironic that lurking amidst a lot of crappy 403b's was a possibly excellent 403b with 8 great Admiral class Vanguard funds, and nobody knew anything about it. I think it's fairly common that Security Benefit is listed along with other insurance 403b providers available to educators, and if it is, then the Direct Invest option might be the way to go. Granted, the Security Benefit rep is not going to be interested in the Direct Invest option, but it looks like this DIY 403b takes the rep out of the loop. It also seems ironic that, assuming it's as good as it appears to be, the program will only exist as long as Security Benefit can make millions off of the other expensive 403b's they sell to educators! Thanks for your efforts (and for this website!) in the cause of better retirement options for educators!
  11. The folks here at 403bwise are known to be the best source of information on 403b’s. So here’s my question: Is it possible that the NEA Valuebuilder Direct Invest 403b through Security Benefit is as good as it looks? Granted that all of SB’s 403b’s except the Direct Invest 403b, have loads, high expense ratios and other fees. Is it conceivable that after a widely publicized court case brought against NEA and Security Benefit, SB put in the Direct Invest 403b for DIY educators? 403bwise has had years of experience dealing with 403b’s that are good for everyone except the contributing educators. Here’s the NEA introduction to the NEA Direct Invest 403b: "An option for the do-it-yourself investor NEA® DirectInvest® is part of the overall NEA Retirement Program and is a voluntary retirement savings and investment program designed for educators. For those NEA Members who feel confident enough and wish to make their own retirement planning decisions, there's an online way to invest in the NEA Retirement Program. DirectInvest offers a convenient way to invest through a secure Internet connection. You should consider DirectInvest if: You are familiar and comfortable with transacting financial business over the Internet You understand investment principles and strategies You have your own plan for closing the retirement gap” http://www.nearetirementprogram.com/#!nea-directinvest/c24dk These are the Vanguard funds offered in Direct Invest: Vanguard Total Stock Market Index ER 0.05% Vanguard Total International Stock Index ER 0.14% Vanguard Intermediate Term Bond Index ER 0.10% Vanguard 500 Index ER 0.05% Vanguard Growth Index ER 0.09% Vanguard Mid Cap Index ER 0.09% Vanguard Small Cap Index ER 0.09% Vanguard REIT Index ER 0.12% Although the funds all have a 12b-1 fee of 0.01%, I believe that it is included in the ER. Let’s find out more about Direct Invest!
  12. PEteacher, have you checked out the threads on NEA/Direct Invest on the Boglehead forum? https://www.bogleheads.org/forum/viewtopic.php?f=2&t=180418
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