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gerry lef

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  1. gerry lef


    JEM charges $2/participant/month. The participant fee is paid by the district and offered through CalSTRS. CalSTRS offers 403(b) plan administration services to public school districts and other education agencies through a contract with a third party administrator (TPA). The TPA is required to be totally independent of any 403(b) sales in the employer’s plan, including through any affiliated companies. CalSTRS selected JEM Resource Partners through a competitive proposal process to offer the 403(b) TPA services. These services are a part of the CalSTRS 403bComply program. The underlying fund fees apply as well. Here is the link. http://www.calstrs403bcomply.com/publicsite/ As I mentioned, their web site is terrible. At this time, it is hard to download statements, impossible to change allocations or increase withholdings, etc. The district office has the necessary forms to make changes the old fashioned way via mail. So, the lack of web access is not a big deal for now! I'll take the low cost any day! Hope that helps. Gerry L.
  2. bps are basis points. It is another way to show what you are paying in admin fees, advisor fees, 12b-1 fees, and other???? to invest in a certain fund, cost of a middleman etc. Usually any thing over 100 bps is listed as 1% or more. For example; 100 bps = 1% or .01 So, for my cheapest 457b plan, I pay 1% of total assets for a basic index portfolio. On a theoretical $50,000 account balance, that would equal $500 per year in fund expenses.
  3. joman 52, As you probably know, the providers you have listed are never going to be as cheap as Vanguard. There are some providers out there (see the 403b ASP post) that can offer 457b plans with index funds for 50 bps or less, but adding providers for many of us is like swimming upstream. I have access to Nationwide, Hartford, AIG/Valic and FTJ Fundchoice. The cheapest is 100-110 bps for an index portfolio. Are you in California by chance. CalPERS overs a 457b plan for around 50bps. No it not Vanguard, but that may be one option for you. If not in CA, does your state have a plan that you can join. It is worth a try! Good Luck! GerryL.
  4. gerry lef


    sullivanke, Keep us posted. 403bASP also offeres 457b & 401a plans, which I am trying to add to our current 457 line up. It has been a long road to this point and adding a true low cost provider is a long term goal of mine (with a minority of other employees). I have told all of our providers that anything over 50bps (total cost) for an index portfolio is a rip off! As I stated before, our cheapest provider offers index funds for around 100-110 bps (total cost). I hope 401/403/457ASP can make some corrections/service adjustments and it sounds like they are. As you stated, they have very transparent fees and offer a low cost option for smaller plans like ours. My wife's district uses JEM as a TPA (there website needs a lot of work, and I have service issues with them as well, but they offer Vanguard and others). They probably had a flood of new business as well as 403bASP!. GerryL.
  5. Hi sammy g & welcome. I realize there is a difference between getting advice from a salesperson versus an investment advisor. But adding 2-3% for active management on top of 1.5%-2% of what my existing plans charge now, is insult to injury! I also do not buy the argument that active management would have saved me from this downturn. Isn’t this market timing!!!! In my mind, there are very few people who can time the market or if he/she is able to do it, sooner or later they too, fail. It is pretty apparent to me that if the major financial institutions did not know what they were buying (crowd mentality), how is active management of a $25, 50 or 100k portfolio going to be getting sage advice over an institution with billions in assets? My apologies to any active managers out there looking out for the $25k - $100k portfolio in a 401k, 403b and/or 457b plan. In my case, active management would never pay for itself. I have 15 years to work, put approximately 8.5% of our pretax salary into a 403(b), 457(b) and a 401(a) plan. We (wife & I) have maintained a 70/60% stock – 30/40% bond portfolio for the past 14 years, and will start to wind down our equity position in 10 years. For the 1.5-2% you have to pay now, a certain amount of advice for new investors should be included (and the advice should come from more than a salesperson). I think the bigger issue is investor disclosure and education! Know what you are buying and paying for (and also realize what you are not paying for). Know that no one can predict the future direction of Wall Street. My $.02. Gerry L.
  6. bruce 0661, For me it comes down to product offered and costs. We have four 457(b) vendors. Two are insurance companies (Valic & Hartford), one is Nationwide and the other is FTJ fundchoice. Valic and Hartford are annuity based products that are high cost. Nationwide is ok as they offer their own index funds and the cost is ok. FTJ is an open source mutual fund platform. I can basically get any Vanguard fund and/or any Fidelity spartan funds. The choice is great, BUT the cost is 85 bps (.85%) plus the mutual fund fees. We are trying to lower this cost, but it is an uphill battle. FTJ is offered through a vendor/advisor hence the 85 bps fee. We would have a better chance to LOWER the cost if there are less vendors (we are working on that now). I will not be satisfied with my 457(b) plans until employees are offered a reasonable selection of index funds (thinking TSP here) for 50 bps (.5%) or less in total fees. The more assets you offer, generally the better the pricing you can get. With multiple vendors, the assets under management get really spread out. One option, I tried (it failed) was to provide for an advisor based mutual fund platform (FTJ) for people who needed a lot of guidence/hand holding, but offer a second no frills mutual fund platform at very low cost for the do-it-yourself investor (457bASP, JEM, etc). In the end, management/HR did not want to limit employee choice, etc. Needless to say, I am still working on making some changes.
  7. gerry lef

    457 Question

    There is really nothing that I am aware of that would limit teachers from having access to a 457(b) plan. In rural school districts where I live, the County Office of Education offers 403(b) and 457(b) plans. The 457(b) plan they offer is with CalPERS. If the Mass State Plan is a good one, push HR/Admin. to offer it to everyone. Gerry L.
  8. sullivanke, I have one I put together. It deals with basics, the providers we have, the costs involve, etc. I also have basic 60-40 portfolio's of all our providers that show costs. It is an excel spreadsheet and you are welcome to it. Email me at gerryunderscorelefATyahoo.com or via PM and I will send it to you.
  9. sullivanke 1) Is it easier to initiate a 457 and allow companies like Fidelity or Vanguard to be vendors than the 403b? Not sure if it is easier to initiate, but it is still asset driven. To get good pricing from Vanguard you need a lot of assets. As of 1.5 years ago, Vanguard stated to me that if would need something like $5+ million in assets to administer a 457(b) plan. Fidelity was a lot different, they wanted at least 5 participants with no minimum asset to be transfered. Not sure if this is still correct or not. Vanguard also works with some smaller independent firms, that are low cost and offer their products! Pension Specialists was one firm they work with in California. There are others. Check out 403(b) ASP. They are a mutual fund platform with very low expenses! See the recent thread on them. I do not have a 403(b), but I have a 457(b) and 401(a). We have four providers: Hartford, AIG Valic, Nationwide and FTJ fundchoice. FTJ fundchoice is the best we have (it is a mutual fund platform) but expenses (or middleman fees) are 85bps plus the index fund expenses. I have been trying to add 457(b) ASP but it is not easy!!!! Management has basically told me one of the current providers will have to leave or be forced out in order to add someone else. Maybe AIG Valic will disappear (I can only hope). My .02 cents. Gerry Le F. One more point, does your school district have access to a State 457(b) plan? Some states have good low cost plans. That could be an option? Gerry Le F.
  10. Related to cost, my wife's SD is paying the $24/year participant cost to use calstrs 403bcomply. This is a very reasonable option given the loss of custodial accounts with individual mutual fund company's under the new regulations. Gerry L.
  11. pbm, many 457(b) governmental plans are dominated by insurance companies that add a layer of fees by offering vanguard, tiaa cref, etc in addition to there own funds and/or annunities. I have four providers (Hartford, AIG/Valic, Nationwide & FTJ fundchoice) that all add a layer of fees similar to what you are seeing in the new 403(b) accounts. Based on what I have seen, the 403(b) plans are NOW catching up to the high fees of most 457(b) governmental plans. sschullo advise is good. If you SD goes down the that road of offering a 457(b) governmental plan, be an advocate! Otherwise insurance companies will dominate these plans at your SD as well. Another option, see if your SD has access to a state 457(b) plan. If you are in CA, CalPERS has a reasonable 457(b) plan. And there are some very low cost providers out there. 401kASP.com is one and they offer 457(b) plans. gerrylef
  12. jbs, you have to break it down to the basic's for your fellow employees. I have a spreadsheet of 60-40 portfolios with yearly cost on a 25K balance and here is what this is costing you (our providers: Hartford, FTJ fundchoice, AIG Valic and Nationwide) versus going with alternative ######. Most people can do the math from this point. Send me a PM and I will send it to you. It may or may not help. It was the only way I got some interest from my fellow employees. I have to pay 100-105 bps for a vanguard index portfolio with FTJ. I am fighting to add ASP with 457(b)/401(a) plans and my costs would drop to 25-30 bps on the same portfolio. Do the math over the next 15 years I will be working, and some employees will take notice. There will always be people who need lots of handholding, but these people you can't reach anyways.
  13. 2366967 - Well as you know most of this is asset driven. The more assets you can bring to the table, generally the better the deal you get. I would really try to educate your fellow employees and are they really getting what they are paying for with an insurance company for example? If your distict is offering financial planning help, show them how that can be really unbias advice (because they are not selling you anything - I hope that is the case). If you do not need the advice but once or twice a year, here are your saving versus paying for that advice 365 days/year. With the money they save, take the former salesperson/teacher to lunch and call it even. I did a full spreadsheet of 60%-40% portfolio's of all of my 457b providers with all the costs. An apples-to-apples review of the portfolio's and their costs. I can send it to you if you send me a pm. The apples-to-apples review was the only way my fellow employees could really see what they were paying and what they could save by going to a low cost provider. I even did a FV (future value) spreadsheet to show people what they could save over the next 15-20 years using the lower cost plan versus paying for the higher cost plan. In my case, I saved something like $18k in fees with a 7% return over the next 15 years! It was a lot of work, my employer allowed me to do this, but on my own time. Next week, I will be finished and management will start doing the background work to add another provider! Good Luck and push the issue. I was the only interested in this at first, because no one really knew what they were paying or getting (I did not know until about 6 years ago). The cheapest plan we have access to is 100 bps. The four other providers are 150 bps to 200 bps - too expensive! The provider we will be adding charges about 30-40 bps for a fully index portfolio! My employer was not willing to go with one provider, so I had to build the support for adding a fifth outfit! It was a long time in coming, but I am glad I did it. Fight the good fight. Gerry Le F
  14. The 401(a) is a contribution from your employer and it I am not mistaken is considered a pension (therefore not related to deferred compensation plans & yearly contribution limits). My employer started one in 2002, after they stopped offering new hires retirement medical benefits. Geertom did you mean employer limits or employee contributions limits under deferred compensation plans???? Gerry Le F
  15. tony, thanks for reposting this. I have not seen it, but what a great little guide. I will use it with my fellow employees as I am in the process of building support to add a low-cost 457b and 401a provider where I work. Gerry L.
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