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  1. Liu, Fidelity is an excellent company, on par with Vanguard in my opinion. Just make sure you aren't getting access to Fidelity funds through a 3rd party provider like an Insurance Company. Often times I have heard someone say that they have Vanguard in their district, only to find out that it is actually just access to Vanguard Funds through another provider which of course would result in high fees for low cost Vanguard funds. If in fact you do have direct access to Fidelity, consider yourself lucky, we seem to be a dying breed. Bruce
  2. I have to chime in because I am one of those knuckleheads that has spent countless hours advocating for good 403(b) choices in my district. While it has been extremely rewarding to get Vanguard into my district, and educate enough people so that we now have over 80 people with Vanguard, it has been a tremendous time committment, and I really don't even like to think about the amount of time I have put into it. I consider it my charity work for the year. We all know the 403(b) system is a joke and the way it's run should be illegal. We all know the Insurance Companies have gotten rich off teachers and that selling Variable Annuities inside a tax-deferred account should be some sort of SEC violation, but it isn't. The real crime is that the Federal Government has it's Thrift Savings Plan (TSP) and we're stuck with Variable Annuities. HEY FED, THANKS FOR LOOKING OUT FOR US! There is one thing I will never understand though, is if there's a way to do it right, namely one low-cost provider, that is easy to manage, and truly gives teachers the opportunity to "Teach and Retire Rich," why haven't we been able to make it happen? Why aren't we that strong?
  3. Tony, When I was first trying to get Vanguard in 3 years ago, the first thing I did was ask to meet with the business administrator. He told me that the Board was, "not interested in adding Vanguard at this time." He didn't know what he was talking about and had no idea even what Vanguard was so he was a dead end. Next, I wrote a 5 page letter and sent it to each Board Member explaining how fees erode away retirement savings and one of the Board Members was a college professor and knew a little bit about 403(b)'s and she was nice enough to e-mail me back and say "tell me more." It was through her that my efforts started to gain some traction. It's my opinion that if even one Board Member takes an interest in your cause, you have the foothold you need to make a difference. As we all know, all it takes is a good education about 403(b)'s and you understand why Variable Annuities and the fees they charge have no place in our 403(b) plans. So you answer your question, YES, I would definitely e-mail your Board Members and find out why they don't think you should have a low cost option. The chances are they will have no idea what you are talking about, but one of them might be willing to learn. As a good friend told me, "when you speak to the Board of Education, speak honestly, speak with passion and conviction, and hope that someone cares enough to listen." We will only get what we are willing to fight for. Bruce
  4. Hi Everyone, It's been a while since I've posted but that's because I've been busy making sure my district here in New Jersey keeps Vanguard. Three years ago I worked my tail off to get my district to approve Vanguard as a 403(b) vendor. Then I rested. A year ago, with the new regs on the horizon, I got back to work. I began e-mailing the Business Office in 2007 requesting a meeting to discuss their plans for meeting the new regs. They ignored me, but I was cc-ing my Union President and Board President on all my e-mails. Over time, I was able to convince my Union President how important it was that we don't allow the district to take away our access to Vanguard. The Board President has been extremely sympathetic to my concerns as well. On December 8th we finally had our meeting with the Business Administrator, where we were told that the district would be using Great America Plan Administrators as the TPA and we would be losing Vanguard. We were told, "the people with Vanguard will just have to pick a new provider," as if there was no difference between Vanguard and the 5 Insurance Companies I could choose from. Needless to say I was seething. We were also told that Great America performed the TPA services for free to both the district and the participants. That struck me as very suspect. After the meeting we put together a packet of articles for all the Board Members showing the importance of having a low cost 403(b) provider in the district and the Union President wrote a letter on behalf of the Union Membership stating the same. On Dec 11th, I spoke at the Board of Education Meeting to the importance of keeping a low cost 403(b) provider in our district. (The approval of Great America as the TPA has already been withdrawn from the agenda so I knew we were in good shape.) The Board Members listened, and of the 5 who spoke, they all essentially stated, "this is the teachers plan, and if they want Vanguard, then they should be allowed to keep Vanguard." How this plays out moving forward is unknown. As of January 1st, the district will be managing the plan, and it will certainly take a while for them to get the mechanisms in place to adequately run the plan, and in the future, we may need to fight this fight again, but for now Vanguard is safe. It should be said that I have been very outspoken in the 403(b) world in my district for a few years and I have earned enough respect that when I speak about 403(b)'s, the Board Members are willing to listen, and they trust what I have to say, but there is no reason YOU can't do the same in your district. Turns out that the power of the truth makes a very compelling argument. Just because your district has already decided what to do moving forward does not mean they can't change. Get out there and fight for what you know is right. Good Luck. Bruce
  5. When I was offering presentation about the perils of the 403(b) in my district a teacher came, who then switched to Vanguard, and who is now our Union President and he is totally on board with making sure our district maintains a low cost provider in whatever plan they come up with. A board member at the time also came because she was a college professor with access to a 403(b) and she has since become our Board President and she is on board with maintaining low cost choices. All that said, our new business administrator has informed me that when he gets up to speed on the new regs we will be meeting to work together to establish a new plan that meets the new regs and is satisfactory to the teachers. My fingers are crossed, but the message is to get out there now and advocate for low cost providers before it's too late. If you make enough noise they will listen. Go to a Board Meeting and make your voice heard. If you sit back and do nothing, don't be surprised if your plan stinks.
  6. Like many of you, my district is working on meeting the new regs and I've been appointed by my Union to act as the teacher representative to the Board while they figure out what to do. I'm sure they will consider using a Third Party Administrator (TPA), which I am completely against because it will create more expense to the teachers, but my question is exactly how a TPA charges. I went to a presentation last year and listened to a TPA tell me that they had one of the lowest costs in the industry at around 1%. I argued with him that that represented 5 TIMES what I currently pay for my account at Vangaurd and he argued that I was getting great value...blah, blah, blah for my 1% which I easily identified as a hollow sales pitch but my question is this. If my district does in fact decide to use a TPA that charges 1%, and my 403(b) is currently with Vanguard, and Vanguard ends up still being a part of our plan, does that mean that the TPA will be entitled to take 1% of my current assests? If I have $150,000 in my 403(b), am I correct that the TPA in that first year will be entitled to $1500 of that money? Thanks, Bruce
  7. I don't know what my district is going to do. I have tried to get the district to get going to meet the new regs but our district is in such flux, interim Assistant Superintendent, no current Superintendent, interim Business Administrator, that nothing has been done. I have little confidence that I will like what they come up with when they get around to it however.
  8. Hey Bangs, Check out my website at www.mcnuttmath.com and follow the links for 403(b)'s. When you get to the main 403(b) page there is a link on the left called "How I Got Vanguard." There you will find my Vanguard story. Bruce
  9. I you really want the numbers, try this financial calculator at Bloomberg.com http://www.bloomberg.com/invest/calculators/savings.html
  10. What a fun thread to read, but I think it's going in circles, so let me summarize from my perspective. The entire financial industry is designed to allow investors the OPPORTUNITY to make some money, while GUARANTEEING that advisers and advisory companies make money. It's a total sham and everyone knows it. There is very little that seems truly honest about the financial industry; that's the way it's been; that's the way it is; and that's the way it's going to continue to be. The fact of the matter is that just the fact that the legitimacy of the financial industry is debatable implies that it's not legitimate. The fact that disclaimers exist on every piece of financial literature is further evidence that something isn't on the up and up. Hidden fees, undisclosed fees, hypothetical past returns, it's a lark; but...... ...the greatest thing about the entire industry is that it is TOTALLY BEATABLE. It just doesn't take that much to learn that diversified, reasonable allocated, dollar cost averaged, low cost, indexed portfolios, over time, make a your portfolio a guaranteed winner too. I know a guy who works at one of the big investment firms, and he oversees many millions for many personal investors, and I asked him, how does your boss assess you each year? Does he compare how your clients have done versus the S&P 500, or does he compare your clients performance to a Target Date Fund? His response, "performance is never assessed, I am assessed by assets under management, the more people I bring in, the happier my boss is." The industry is crooked. If you claim it isn't, you're either part of the industry or delusional, my guess is part of the industry, and while I readily admit that there are honest people IN the industry, the industry itself is designed to take advantage of the weak. Keep this thread going though, I am really enjoying it!
  11. Intruder, I understand your point about SD's using a TPA to protect themselves from being in violation of the new regs, and I understand why the participants should bear the cost, but 1% of net asset value is absurd, and I'm sure most TPA's are much higher. Instead of being gouged by the insurance provider, I will be gouged by the TPA, and in many cases the participant is likey to be gouged by both. There has to be a better way to be in compliance with the new regs, yet I still keep most of the growth of my investments. Are there any TPA's out there that just do the record keeping at a reasonable cost and do not force me to pay 1% for investment guidance that I don't want or need? Is it possible that a district could charge all it's participants a flat fee, or a small percentage of contributions, and use that to pay someone to oversee the 403(b) in a district? For a district with 1000 people contributing, if everyone paid $50 per year, that's $50,000 to hire someone to manage the 403(b). I would gladly pay $50 per year, or some fair percent of contributions to offset the cost to the district. Is there anything that says that can't be done?
  12. Tony, I busted my ###### to get Vanguard in and I have no intention of letting the district blindly bring in a TPA now. I started this thread to get some insights into what others think, and increase my own knowledge base, so that when I fight this fight I win. The responses were excellent, especially JSimmons with "4) As part of the NAGDCA Web-seminar of 1/22/2008, Elaine Immerman, Associate General Counsel for TIAA-CREF, suggested as an option "Eliminate plan features that make compliance difficult, E.g., plan loans, hardships, catch-up contributions" (Slide 58 of that presentation)" I will research that Web Seminar and incorporate make it part of my own. I too think that by trimming the fat, i.e. loans, hardship withdraws etc. we can keep a low cost plan that makes a lot of sense for the VAST MAJORITY of 403(b) contributors.
  13. I don't need to run it on Morningstar. The average weighted expense ratio as reported on the Vanguard website for the 2035 Target Date Retirement Fund at Vanguard is .19% (I actually thought it was .18%, I think they may have raised it) $150,000 ###### .18% = 285 plus a $15 yearly fee is $300. Pretty good deal if you ask me. "Better in my pocket" by the way is just my way of thinking.
  14. OK, maybe I'm being a little greedy wanting my SD to offer a 403(b) and then also pick up the tab on managing it to meet the new regs, but the thought of having a TPA charge even 1% is revolting. I would hope that my employer out of the goodness of it's heart would pay someone in the business administrators office to manage the plan. It would be a very nice perk if they were to do so, but I have no great answer to the question, "It's your benefit, why should they pay for it." Are there really only 2 choices? Either my SD covers the cost or they hire a TPA that runs the plan at a minimum of 1% of assets. I currently have $150,000 in my 403(b) and in my 2035 Target Date fund at Vanguard this year I will pay about $285 in expenses. If my SD brings in a TPA I will pay an additional $1500 with no added benefit what so ever. When I found out what my fees and expenses were at Valic I almost threw up, then I got my SD to add Vanguard and I felt better, I think I'm starting to feel queasy again. I will try to go with Tony's idea, if my SD wants to hire a TPA that's fine, but leave us and Vanguard out of it.
  15. At a 403(b) meeting I was recently at, a TPA extolled the virtues of using his services. Yes, his platform offers many different fund choices, but being that I am a hard core index investor, his choices mean nothing to me. I know for a fact that I can't pick winning stocks, thus I am convinced that I can't pick mutual funds or mutual fund managers any better than if I were to guess. I am however a believer in diversification and low costs, so Vanguard, which is one of our current providers, gives me all I need. This TPA announced at the meeting that his company, "serves as a record keeper." So I asked him, "doesn't that mean that instead of the district assuming the responsibility of managing the 403(b) plan as the new regs require them to do, they hire a TPA to do the work for them and pass on the costs to the participants?" His answer was that I would get tremendous value out of the 1% I would pay and my investments would certainly perform better. I know that is a salesman load of *$#&, he can't guarantee beating the market by 1% over the next 30 years which begs the questions... What does a TPA really do other than the districts paperwork? Won't the net effect of a TPA be higher costs for my investments? Is it really that hard to manage a 403(b) plan if you limit the district to one or two providers? It seems to me that a TPA is just one more way to erode my nest egg over time with fees and costs that I should not have to pay.
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