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CLJ17

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  1. Once your wife retires all of her options are available. She may roll it to an IRA or the Vanguard 403(b). IRA's have a 10% penalty tax if withdrawn before 59 1/2. She will also need to get the AIG transfer form and the form from the receiving company. 403(b) money is taxed as ordinary income. Hope that helps!
  2. Perk, A little more information is crucial here. Is the 403(b) plan a group contract? Chances are it is not which means it is an indivdual contract. That means that no one can force you to close or move your account. It is not that simple to terminate a 403(b) plan. Have they sent you anything asking you to agree to move to an IRA? I dealt with a district that was attempting to do this. Once I educated the board attorney on the difficulty and near impossibility they changed their course of action and have actually made their plan better than beofre.
  3. Plan With Ease is a company that ING bought called CitiStreet. CitiStreet was a firm that Citigroup and State Street bank created years ago. The firm has experience in 403(b) administration. One word of caution that this is a product sponsored TPA. It is not a truly independent TPA. They offer free administration for 2 years from what I have seen because their group contract must be an approved product. What I have not seen is what the costs would be after the two years is over and they have not written enough business to cover their costs. The work that a TPA does definitely has a cost to it.
  4. Scotty is right on the money! Nothing new with that! Happy New year Scotty!
  5. My pleasure Steve! I give you credit for trying to help someone. I thought it worth while to also clarify that if a person who has attained the age of 59 1/2 they may rollover to an IRA even if they are still employed with the employer where they have their 403(b) account. The terminology of rollover is exactly that. With the new regulations if a person is to move money from one approved 403(b) vendor to another it is now called an exchange. Previously it was called a 90-24 transfer
  6. Here is a link to the custodial account agreement: http://www.lincolninvestment.com/about/pdfs/RS_TSA.pdf. See section 8 for fees. There has admittedly been a lack of written specifics, which has been explained as being the result of Lincoln only recently deciding to take on these VG orphaned investors. Because Lincoln limited participation to people currently contributing to a VG account, I took a little bit of a leap of faith and jumped on the train before it left the station. I figured in the worst case I'd just keep money there that I wouldn't ever feel a sudden need to move around. I'm grateful to CLJ and his company for providing the option, and I'm now just waiting for the promised improvements to their website to allow individual control of fund investment without the need for an agent. Faith is the key to peace of mind Johnny. I'm glad you made the train! I must give all the credit to my firm for doing this. I deserve no credit but I thank you for your gratitude! By the way we have the ability to offer this to new participants too! I am assuming you did the transfer in kind of your Vanguard funds from their custodian to ours. If so then you noticed that there were no costs associated with the transaction and all of your funds are in one place with just one custodial fee of $35. I truly believe you will have a different perspective about Lincoln not being like the traditional 403(b) provider. I want to explain about the website that is being created. We wanted to make this look like you were still working directly with Vanguard as much as we can. That is no rep involvement with you and the ability for you to make exchanges like you have in the past. You will make all of your own decisions and transactions just give it some time. Please always make sure to go to Vanguard’s website and read the prospectus before doing any exchanges. There are minimums and short term trading fees that you will need to be aware of. I also want to assure you that in the meantime if you need to make some changes do not hesitate to call us to facilitate your needs. I have seen some posts on here that say “watch out they are going to try and sell you other things”. What my reps are doing is following the client’s objectives. If one of the objectives means leave me alone then they leave them alone. Why would any person with any sense want to waste their time trying to offer other things to someone who has no interest? DUH! The best of all of this is that we have made people happy. We have relieved a great deal of anxiety and frustration. To talk to people that we have helped with this and to hear their joy is worth it. This is truly what it is all about. I will be honest with you when I say our firm’s motto has always been in this order help people, have fun and earn a living! When you put others interests ahead of your own it will always come back to you. Have a great day!
  7. Rich, Which district in Oak Lawn? There are multiple districts in Oak Lawn. OLCHS I've gone over this subject again and again with the Lincoln Salesman/Advisor. Although producing no documentation, he says that the account will be on their "Retirement Solutions Platform" which doesn't charge that 90 basis point fee, and which is normally limited to a bunch of load funds. As a special case, they're allowing Vanguard funds, and because Vanguard doesn't charge a load, all that's left to be paid is a $35/year custodial fee. He also said this special exception is available nation-wide to anyone who has Lincoln as a 403b choice and also will be transferring from a Vanguard account currently receiving contributions. Just make sure they don't sign you up for the Premier account, which has that .9% fee. I'm still not sure how comfortable I'll be with this company in the middle, but as of now it seems the best choice. Johnny, The rep told you the truth. OLCHS I believe that you are referring to OLCHS 229? This is not a district in my control. The rep there is is an independent person who brokers through us. Let me make a call for you and see what I can do for you. If it is 218 than I am in control of that district but I believe when you said "her" than it must be 229. Cl you are correct 229 I am on it for you.
  8. CLJ17

    Vanguard

    Let me ask you then, CJ, because you seem to be in the know about buying and selling Vanguard funds when in a 403b custodial account with Lincoln. As far as I can tell, the process of moving funds is going to always involve filling out forms and contacting the agent, then waiting a couple of weeks for the process to execute. Lincoln still seems to be agent-centric. Johnny I hate to disappoint you but you will be able to make changes on your account via the website once it is up and running. Lincoln is creating a website specially for VG clients. In the meantime you will call the rep and speak to him/her and they will call in the trade that day. Our reps must phone in the trade immediately. No paperwork required. You do have a choice not to use Lincoln and do something different if what we have done to make Vanguard still available for you at low cost is not to your liking. It is America! Did you ask for the custodial account agreement? Did you receive it? I'd be glad to. It is actually quite simple. They do not have the systems in place to do the compliance component of everything vendors now have to do. First they would need to have an actual 403(b) custodial platform. They would need systems to keep track of the approved vendors in each district that they were a vendor in. I could go on and on but for the sake of time all of this would mean more costs and the investors would see an increase in fund expenses to cover the costs. Since their 403(b) business is a mere pittance to their overall business it was purely a business decision not to take on the responsibilities. Keep in mind that VG is not the only vendor to back away. CLJ: So what you are saying is that VG cannot/will not deal with individual SD to offer VG products because it is not equipped to perform all of the compliance services required under the IRS regs but will offer its products to wholesalers and vendors who can offer VG on their platforms which are capable of providing all of the services necessary to comply with the regs. The only other way VG can be offered is if a SD is willing to take on the role of administering the plan and will perform all of services necessary to comply with the IRS regulations and pay for the costs, such as hiring personnel who have the expertise to set up procedures to comply with the IRS regs on the SD systems. Correct in the first half of your post. To correct the second half the district assumes the risk if they sign Vanguards agreement for Vanguard accounts. They also are inconsistent with their other vendors because they asked all of them to sign the district agreement. The district would not hire anyone for VG. How will the district comply with the IRS regs such as max limits, MRD, loans, universial availability, hardship distributions, 415 limits, etc if it does not hire persons with the requisite expertise since as you stated VG is not equipped to perform compliance services required under the IRS regs? As you yourself said the diistrict assumes the risk if they sign VGs agreement. How will compliance with the regs be achieved? Inruder, I was stating that a district will not have to hire new employees. Most have gone the route of a TPA which covers their entire plan. I believe that the TPA still does all the work. If a district signs a vendor’s agreement from any vendor not just VG they assume the risk of that vendor which is why most school board attorneys have recommended not to sign a vendor’s agreement. In fact I believe that the TPA’s indemnification clause will be voided for that vendor. Why would a district risk that? I am not an attorney but this is what I have heard. If a vendor is serious about being in the 403(b) market place then they should be in full compliance to be able to handle the administrative duties now required. Keep in mind that insurance companies also exited the market too! If I were a school district I would realize that this is our districts plan and vendors should not dictate to me how to run my plan. If they want to be a part of it then they should sign on and do what is required.
  9. CLJ17

    Vanguard

    CLJ, I'm sorry if I seemed too critical. Thank you for hanging out here and being a source of information. I did see a custodial agreement, the same one available on the website, which confirmed the $35 fee, but didn't give any details on procedures unique to this Vanguard arrangement. In fact, I haven't seen anything official-looking specifically mentioning the arrangement. I certainly wasn't disappointed by your news. The current incarnation of the website doesn't offer anything like what you've promised and my hopes had sank after my first log-on. Can you answer why this deal was only available to people already contributing to VG and isn't open to new investors? Johnny, This whole arrangement was made recently. Keep in mind that Lincoln Investment is a small privately owned broker dealer. We are not the big guys for sure and we are a specialty firm that has focused in the 403(b) market for 40 years. It takes some time for these things to be developed. I can assure you that the website is being developed for you. In the past the main reason that we did not allow exchanges on the website is that a person may buy an "A" share of one fund family and then decide to move to a different fund family and have to pay sales charges all over again which is the main reason for rep involvement to protect our clients from this. Many mutual fund families have what's called short term trading fees. Vanguard is not absent from this for sure. This means that an investor must hold that fund for a period of time. If they move out of it prior to that date then the fund family can charge the short term trading fee. So in the best interests of the client the rep has always been involved to make sure that the client is aware of everything. It all gets back to service. In this new dawn of the 403(b) world we knew there was a need to help our employer clients to keep Vanguard available to their employees who have been using Vanguard. We were the first firm to step up and make Vanguard available for those wishing to continue to do it themselves. I am positive that other firms will follow suit. Patience is a virtue as you well know and it is in call here. I hope that we can be appreciated for our looking out for people which is truly our firm’s main objective. I am glad that you have the custodial account agreement. All of our fees are transparent and easily found in our material. When it says the fee is $35 a year that is exactly what it means.
  10. CLJ17

    Vanguard

    Let me ask you then, CJ, because you seem to be in the know about buying and selling Vanguard funds when in a 403b custodial account with Lincoln. As far as I can tell, the process of moving funds is going to always involve filling out forms and contacting the agent, then waiting a couple of weeks for the process to execute. Lincoln still seems to be agent-centric. Johnny I hate to disappoint you but you will be able to make changes on your account via the website once it is up and running. Lincoln is creating a website specially for VG clients. In the meantime you will call the rep and speak to him/her and they will call in the trade that day. Our reps must phone in the trade immediately. No paperwork required. You do have a choice not to use Lincoln and do something different if what we have done to make Vanguard still available for you at low cost is not to your liking. It is America! Did you ask for the custodial account agreement? Did you receive it? I'd be glad to. It is actually quite simple. They do not have the systems in place to do the compliance component of everything vendors now have to do. First they would need to have an actual 403(b) custodial platform. They would need systems to keep track of the approved vendors in each district that they were a vendor in. I could go on and on but for the sake of time all of this would mean more costs and the investors would see an increase in fund expenses to cover the costs. Since their 403(b) business is a mere pittance to their overall business it was purely a business decision not to take on the responsibilities. Keep in mind that VG is not the only vendor to back away. CLJ: So what you are saying is that VG cannot/will not deal with individual SD to offer VG products because it is not equipped to perform all of the compliance services required under the IRS regs but will offer its products to wholesalers and vendors who can offer VG on their platforms which are capable of providing all of the services necessary to comply with the regs. The only other way VG can be offered is if a SD is willing to take on the role of administering the plan and will perform all of services necessary to comply with the IRS regulations and pay for the costs, such as hiring personnel who have the expertise to set up procedures to comply with the IRS regs on the SD systems. Correct in the first half of your post. To correct the second half the district assumes the risk if they sign Vanguards agreement for Vanguard accounts. They also are inconsistent with their other vendors because they asked all of them to sign the district agreement. The district would not hire anyone for VG.
  11. Rich, Which district in Oak Lawn? There are multiple districts in Oak Lawn. OLCHS I've gone over this subject again and again with the Lincoln Salesman/Advisor. Although producing no documentation, he says that the account will be on their "Retirement Solutions Platform" which doesn't charge that 90 basis point fee, and which is normally limited to a bunch of load funds. As a special case, they're allowing Vanguard funds, and because Vanguard doesn't charge a load, all that's left to be paid is a $35/year custodial fee. He also said this special exception is available nation-wide to anyone who has Lincoln as a 403b choice and also will be transferring from a Vanguard account currently receiving contributions. Just make sure they don't sign you up for the Premier account, which has that .9% fee. I'm still not sure how comfortable I'll be with this company in the middle, but as of now it seems the best choice. Johnny, The rep told you the truth. OLCHS I believe that you are referring to OLCHS 229? This is not a district in my control. The rep there is is an independent person who brokers through us. Let me make a call for you and see what I can do for you. If it is 218 than I am in control of that district but I believe when you said "her" than it must be 229.
  12. CLJ17

    Vanguard

    I'd be glad to. It is actually quite simple. They do not have the systems in place to do the compliance component of everything vendors now have to do. First they would need to have an actual 403(b) custodial platform. They would need systems to keep track of the approved vendors in each district that they were a vendor in. I could go on and on but for the sake of time all of this would mean more costs and the investors would see an increase in fund expenses to cover the costs. Since their 403(b) business is a mere pittance to their overall business it was purely a business decision not to take on the responsibilities. Keep in mind that VG is not the only vendor to back away.
  13. It does not cost a district huge dollars, if any, to begin a 457 plan. Keep in mind that these are different plans and are not included in the new 403(b) rules and regs. The main difference is that 457 plans are group plans while most 403(b) plans have been individual plans. There has been the presence of a plan document for 457 plans for years. Districts are not required to offer 403(b) plans either.
  14. CLJ17

    Vanguard

    I disagree with the premise that "not receiving help" cancels out the benefit of low fees. Especially this year. Everyone lost money (and a lot of it) this year - help or not. My wife got "help" from an ING rep, and her ING portfolio is down more than her Vanguard S&P 500 fund. She had previously received "help" from an American rep, and he advised that she should put her money in the Growth Fund of America (only). How is that any different that someone putting all their money in the S&P 500? The vast majority of research specifically shows that receiveing "help" - ie. being charged more money, leads to inferior returns over long periods of time. Yes, asset allocation is critical. However, it is kind of misleading to insinuate that it is necessary to "provide" all sorts of higher fee fund families in order to get "diversification." You are certainly right to say that someone who puts all their marbles in the vanguard s&p 500 index is potentially playing with fire. However, no more so (and likely less) than someone who has all their money in Growth Fund of America. The TWO most crucial factors in long term investing success, and the ONLY two with broad, sweeping, academic support are low cost and asset allocation. Low cost index funds in the S&P, total Bond fund, International index and perhaps a money market acct. can provide virtually every ounce of diversification a person needs. All can be had for virtually no fee, and can be constructed to fit a person's situation. Furthermore, if you lack the confidence/knowledge, you could simply invest in a Vanguard target date fund appropriate to your risk tolerace/age and do virtually the same. Or, simply use age -10 as the percent of bonds in portfolio. Either of these two SIMPLE options, at .2% fees will (with almost 100% certainty) out pace any similar portfolio constructed of higher fee funds over the course of 30 years. The problem with "providing" people with this "diversification" is that it has been PROVEN over and over and over, that NO ONE can consistently pick FUTURE winners. In fact, a relatively consistent sign of a future loser, is being a past winner. Also, virtually NO funds can outpace the avg. market return consistently. Those VERY few that do cannot be identified in advance. So, people providing advice about which high priced funds to invest in over the course of a 30 year period are wrong, and they are wrong 99% of the time over the long haul. So, as of now, it has yet to be shown that getting "help" is of any help at all. In fact, getting "help" is more likely to lead to lower returns, not higher. Even 1% difference in fees can lead to 10's of thousands of dollars - even 100+ thousand - in lost returns. That is an awful lot of money to pay someone for a service that has been academically PROVEN to not work. People who sell fund advice are the same as car salesman. They are selling a product (and it is not advice) in order to make money. If I walk into a ford dealership and tell them that I need a car that gets the best possible gas mileage, has a tremendous warranty and has great resale value, they are not going to suggest I look at a toyota or a honda. They are going to sell me a ford, simple as that. That is not selling good advice, that is selling a product for a profit and commission. People do not need access to 50 mutual fund families at a cost of $50,000 in fees over the course of a lifetime. What they need is someone to sit down with them for $75 for an hour, 1 time a year and help them look at the asset allocation they have in their .2% fee index funds and see if any changes should be made. But, that does not result in hefty long-term commissions, and, as is human nature, people would rather lose $10,000 in fees that they never see, than hand over a $100 dollar bill from their wallet. Kev Seeing that you compare us to car salesman there is no way I am going to convince you of anything with that perspective. I appreciate the insult! But in the big picture most of the people need someone to help them. If everyone were like you then there would be no financial representatives out there. While I respect the many on here who are actively doing there thing the reality is that the majority of people have no desire, time or background to do it. CLJ...we are looking for low cost options to use the ROTH 403b option, which Vanguard does not offer even if the school district does offer the traditional 403b arrangement. We are very comfortable with making our own decisions on diversification. Since you're in the business, any suggestions concerning a ROTH option would be appreciated. Lincoln and several other firms with fees are other options offered by the district. Thank you. It truly depends on if the district has the 403(b) Roth option available. I have been a little surprised at the lack of the 403(b) Roth being a part of a districts plan. If a district has a 403(b) Roth as a part of their plan we can offer Vanguard funds as one of the investment choices even though they will not. Our custodial platform is a true 403(b) custodial platform that also accommodates a 403(b) Roth. One other thing that our platform offers that Vanguard and some other fund families do not is a loan and financial hardship withdrawal. This really has to do with having your account on a true 403(b) custodial platform. Not that I suggest this to be the reason to use us but in the event of an emergency it’s available. Hope this helps!
  15. They offer index funds for the S&P 500, mid cap, small cap and international. The first three cost .50, and the latter costs .60. There is no bond index fund, but they offer PIMCO Total Return for .68. For more info: https://nea.securitybenefit.com/neavaluebui...ctfactsheet.htm Caution: this is an NEA-endorsed product. That puts up a red flag for me. Security Benefit pays a fee to NEA for the latter's endorsement of Value Builder. As far as I can tell, my district has kept Vanguard. My wife's district, however, dropped Fidelity. APTeacher, Have you noticed that the majority of funds on the NEA self directed are three star funds with only one five star fund and a couple of four star funds? I wonder why that is?
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