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intruder

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  1. OK. But what products are being offered? Transamerica is an insurance company that sells annuities and separate account funds. I bet the admin fees are being discounted in order to sell higher fee products. Also the $1000 admin fee may be only available on simplified plans such as safe harbors with auto enrollments which eliminate admin cost for compliance but require substantial employer contributions such as 3% of comp which will exceed the savings in plan admin.
  2. Before you get too excited over this "victory", the setlement works out to be 0.25% of the plans' assets or $250 for a participant with a $100,000 account balance which is hardly evidence that excessive fees were paid. Gen Dyamics settled because it was cheaper than contuning to pay lawyers to litigate the case and the settlement didnt cost GD a penny.
  3. intruder

    Letterwriting

    The problem is that the bottom 80% of taxpayers do not save for retirement because they cannot afford to do so and the US govt is not interested in subsidizing the retirement of the top 20% who have executive comp plans and/or defined benefit plans in addition to 401k/403b plans by increasing tax deductible IRA contributions. If you want additional retirement savings open a Roth IRA or max out on your 457b/403b for at least $33k a year.
  4. In order that we may all understand what you are talking about in your attached article how about defining in quantitative terms what you consider to be a "high fee plan". And then explain how the costs of administering the plan are to be paid if part of fees cant be used to reduce costs. As previously discussed the IRS has no authority to regulate fees in 403b plans or any other plans for that matter so see if you can stay on topic.
  5. intruder

    Letterwriting

    What you are proposing is universal IRA eligibility which was available from 1982 to 1986 under legislation signed by President Reagan. Universal availablility for deuctible IRA contributions was curtailed by the Tax Reform Act of 1986 which eliminated many other personal income tax deductions such as personal interest, $30,000 employee contributions to 401k/403b plans, etc in return for lower tax rates of 15% and 28%. The Tax Reform Act of 1986 replaced universal availability with the current system of allowing full deductible IRA contributions only for taxpayers with AGI below certain levels ($89K for a married couple) who participate in an employer retirement plan. You can write to Rep. Sander Levin, Chairman of the House Ways and Means Committee which controls the introduction of all tax legislation in Congress. George Miller carries no weight in the House on IRA deductions because Miller does not have any input on offsetting the revenue loss that would result from increasing deductible contributions to an IRA. Given the $1.7T deficits that the federal budget is incurring this year and for future years it is highly unlikely that Ways and Means will propose increasing the availability or the limits for full deductible IRA contributions to benefit the top 20% of taxpayers who also participate in an employer retirement plan (e.g., AGI over $89k for a married couple) instead of extending the current tax rates for 95% of all taxpayers into 2011.
  6. Steve: There is no need to waste time at the Social Security office. Estimated SS benefits can be calculated on line at the Social Security website 24/7. Also NYC pension reps cannot give advice on taxation of benefits in other states.
  7. Under federal law NY taxes will not apply if you move to another state. The NYC teachers pension system benefits are ultimately guaranteed by the taxpayers of NYC which is why NYC residents pay high state and NYC taxes of up to 12.6% of income. Also NYC taxpayers guarantee the 7% return on the NYC teachers 403b fixed annuity. With these great benefits plus social security why would NYC teachers want to leave NY state when they retire since their pensions are exempt from state and city income tax?
  8. Why do you post stories that have no information of what is the matter mentioned in your post and then direct the reader to another party to find out what is being discussed? This post is a waste of time.
  9. Tony: Are you saying that a fiduciary for the plan should not shift to a provider to bring about an immediate 20% savings in fees since it not a substantial savings to participants? You seem to be saying that an employer with a plan that is subject to surrender fees should never switch to a lower cost provider that does not have surrender fees because surrender fees would be due for a few years. Should the fiduciaries breach their duty and contunue with the higher cost plan? As I understand it surrender fees would only be due if assets are withdrawn from MOA duirng a finite period after the change over to a new plan. After the expiration of the surrender period the assets can be transferred without a surrender fee. Why shouldnt the plan take advantage of the immediate reduction in fees and the eventual cut off of the surrender charges? Please explain.
  10. you can leave the funds with the employer and take the risk that the funds will be seized by the employer's creditors or take a distribution and pay taxes on it. I would not leave the funds with the employer.
  11. Tony: Since you posted this article how about explaining just what is the evil that these big bad insurers are inflicting on beneficiares. As I understand it the retained assets which are the subject of the Cuomo fraud investigation are the proceeds of life insurance death benefits which can be withdrawn at any time by the beneficiary if he or she feels that they can get a better rate of return on the money than the interest rate paid by the insurer (around 1%). Withdrawal information is provided to the beneficiares by the insurers.
  12. You need to recognize that the 403b market has changed in the last 3 years since the IRS issued regulations that increase costs by imposing plan administration at the same level as a 401k plan. AS for your questions: 1. You have indicated fees charged by Principal would be 20% lees than MOA which is a significant reduction. I dont know if the services provided by Principal would be at the same level that were provided by MOA such as investment education, call centerts plan,loans, etc. 2. The number of providers for 403b plans with $1M in assets has been reduced dramatically because of the IRS regs. VG and TIAA no longer provide admin services to new plans. I dont know if Fidelity would be interested. Low cost providers are not interested in $1M plans because they dont generate enough fees(0.50% =$5000). 3. As for mutual fund providers you could check to see if Principal mutual funds are available for your plan. You need to revise your opinion on the simplicity of fiing a 5500 for a 403b plan. Effective 2009 a 403b plan must file the same information on a 5500 form as a 401k plan. If you google form 5500-SF on the irs web site you will see that the instructions are quite complex and fines can be imposed if the form is incorrect which is why a plan administrator would want assistance in completing the form. 4. Your advisors are partially correct in recommending against a 401k plan because highly compensated employees (HCE) would be subject to the ADP test which would limit contributions to the amount of contributions made by non highly compensated employees with income below $110,000. For example, if the non HCEs contributed 3% of their comp to the 401k plan then HCE contributions will be limited to 5% of comp. In a 403b plan there is no ADP test so all HCE can contribute the max contribution of 16,500 or 22,000 if age 50. However, if the employer makes a 3% contribution for all employees with 100% vesting the employer could establish a 401k safe harbor plan which would allow all HCEs to contribute up to 16,500/22,000 without being subject to the ADP test. The risk to you if your employer adopts a safe harbor plan is that the employer contribution could be reduced from 6 to 3%. In switching providers you need to be aware of surrender fees. It may be necessary to freeze the account balances in the MOA annuities and only transfer the MOA funds to the new provider when the surrender fees have lapsed. The problem with this approach is that there will be two providers to the plan which will complicate plan administration and 5500 filing. You need to find out if the new provider would be willing/able to complete the 5500 filing using the information from MOA.
  13. John: According to Todays NY Times there is no support by either party for allowing the current tax rates to expire for 95% of taxpayers. The Congressional Republicans want to continue the 2009 tax rates for all taxpayers while the Democrats are split between increasing taxes only for taxpayers above $250,000 or continuing the 2009 tax rates for all taxpayers. The Secretary of the Treasury said today on Meet the Press that the Administration wants to cap the tax on capital gains and dividends at 20% for all taxpayers and only raise income taxes on the 2-3% of taxpayers with income over $250,000. So what tax increase are you thinking of?
  14. Under the finanical reform legislation equity indexed annuities will not be regulated by the SEC, only state insurance departments will regulate EIA.
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