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Everything posted by intruder

  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


    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


    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.
  15. Tony: can you answer a simple question: Why would Congress and its leaders want to run the gauntlet of opposition from the AARP, the unions and all of the boomers who support the dems and raise the retirement age on 100% of future retirees when it can solve the SS funding problem by raising the wage base on the top 7% of wage earners who are in the 31% and above brackets from 108k to 150-160k and come up with the same amount of money without alienating the Dems major supporters? I may be cynical but I think this is an election year ploy by some members of congress for campaign contributions from orgainizations that oppose raising the retirement age in order to get them to vote to raise the wage base to 160k. Also do you think the same Dem leadership who successfully "saved SS" from the Bush administration's plan to reduce SS benefits in 2005 by investing SS assets in the stock market is now going to support a reduction in benefits by raising the retirement age in a recession?
  16. Tony: Kennedy got Congress to pass a tax cut in 1963 that reduced the max income tax rate from 90 to 70%. It took 18 years for Congress to reduce income tax rates again from 70 to 50% because Reagan made it his top priority revive the economy. I dont think Congress will vote tax increases before the Nov elections because it would be political suicide for incumbents. If the Dems lose control in one house in Nov there will be no tax increases next year. Why you think I have gone soft on the Bogleheads web site? You obvioulsy have not read my posts on vesting in a 401k plan and why assets can be shielded from Medicare. To demonstrate my kinder and gentler side I will refrain from responding to Steve's sequel to "Bye, bye, Miss American Pie" ( 7/8).
  17. Just what planet do you come from? The free enterprise misbehavior was the result of the policy initiated by the HUD secretary in the Clinton administration around 1995 to increase the % home ownership by Americans from 64 to 69% by requiring banks to increase lending to low income individuals under the community reinvestment act and then require Freddie and Fannie to buy the subprime mortgages issued to people who could not make the payments. F & F are required to guarantee those mortgages to investors when the home owners defaulted. Unlike the commercial banks which have repaid their government loans under TARP, Fannie & Freddie have borrowed over 150B (with more to come) and because of the high rate of defaults have no way to pay any of it back. Since they are now owned by the US taxpayers it is all of us who will have to absorb their losses with higher taxes. Also you are omitting that earlier this year Obama proposed to allow increased drilling in the Gulf and along the Pacific coast in order to get senators in oil producing states to vote for the proposed energy bill. The rules that were in place at the time of the BP disaster had been approved by the regulatory agencies during the Obama administration who issued the required permits. The only thing agree with you is that the economy is too big to be allowed to fail.
  18. Be careful what you wish for because you may get it. Eliminating 12b-1 fees in 403b and 401k plans will result in the loss of payments by the funds to providers who perform services for the plan which in turn will increase the admin amounts all participants will have to pay for the cost of plan operations. Under the current system only participants who invest in actively managed funds pay 12b-1 fees (.085% in CREF).
  19. Its a no brainer because $1B+ in new taxes will be raised.
  20. Tony: This website is for teachers who are supposed to know how to write sentences in English. Teachers are role models for students. Would you accept such language from a student or would you correct it?
  21. For a PHd you are not very articulate. The second sentence in the second paragraph is a bowlfull of mush of intellectual thought. I merely suggested that Roger needs to understand market forces to make sure his is not wastiing his time as it has been reported on this board that low cost providers such as VG and TC are no longer options under many voluntary SD 403b plans. He should first find out if TC and VG would be interested in becoming an option under his SD's plan and then contact the TPA to find out whether it would be possible to add one or both of them.
  22. Steve: How many employees are there in your SD? Maybe 45,000 teachers and 38,000 staff employees at salaries over $100k which provide a lot more sales opportunities than availablle in his SD. Also how restrictive is your SD plan if it includes Oppenheimer among its 17 vendors. I am not discouraging him. He needs to understand the market forces that are involved here. I dont know any SD that have funds to spare fora 403b plans.
  23. First thing you need to do is to contact the business office and TPA to find out what are the criteria for adding investment options. From what you describe it appears that the SD is not picking up any of the expenses of the plan which is why you have 3 annuity carriers and expensive mutual funds because the fees from the investment products are used to pay for the cost of plan administration and operation. The low cost providers that you are interested in may not be interested in your SD because the sales volume will be too small to justify the admin expeses they will incur. TIAA-CREF and VG have displayed little interest in adding new SDs with voluntary 403b plans. Also the TPA will object to adding low cost providers unless there is a way for the plan to collect the fees necessary to pay for the plan expenses from these providers or the employees who select these investments which will eliminate any advantages of their low fees.
  24. Tony: Stop kvetching and start investing 2x what you are saving now by buying low and sell high because buy and hold is dead.
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