Jump to content


  • Content Count

  • Joined

  • Last visited

Everything posted by dpww13

  1. This is their 403b page: http://www.axa-equitable.com/for-employers...d-services.html I only searched for a few minutes. If I had more time I assume I would find more fees. Here goes, Some lowlights of the EQUI-VEST® 403(b) TSA - Series 100 *You lose 6% if you move the money out of AXA and into, let's say Fidelity, within the first FIVE YEARS! *"Maximum total Separate Account A annual expenses" = 1.49% *Total Annual Portfolio Operating Expenses for 2007 - Ranged between 0.38% and 3.71% *In small print: "This is not a complete description of the EQUI-VEST® variable annuity contract. Variable annuities have limitations. For costs and complete details, contact a financial professional."
  2. elgordo42, At this time Omni has worked out a deal with Fidelity and we can continue using them in 09. Vanguard is also OK, but my district has not made the announcement yet. I think there may be some document the district has to have counsel read through before it will sign. But Omni is as independent as these TPAs can be AND they made this work with Fid and Vang. Check them out.
  3. "If our school district representative signs the Record Keeping Services Agreement from the Fidelity can we keep Fidelity or since they have signed with a TPA are they stuck with the potential poison pill?" Persistence, You should explain your situation and post this question as a new post - there are many bright people who should be able to answer your question. Another option is to call the IRS. I am sorry, but I can't answer your questions - I would only be guessing. I do suggest you draft a letter - show it to a few people who feel as you do, and see if they will sign it - and then send it to the Board of Ed members and whoever is in charge of this issue in your school. If Fidelity is not available, you can fight to change this in 2009. It won't be over and done with. My guess is that it all depends on what the written plan says. If the written plan is written by the ins company (the TPA) then I am pretty sure you can't use Fidelity unless they say you can. UNLESS the written plan doesn't list vendors. Written plans are allowed to refer to a list of vendors kept separate from the plan itself. This allows for changes to occur more easily - without re-writing the plan. This information is directly from Bob Architect - the IRS's 403(b) lead expert. I listened in on the Teleconference with Mr. Architect on December 4th and he said this. Good luck.
  4. Intruder, Thanks for your (as usual) clear reply to Pat. You are a voice of reason that this forum can not do without. *********** Pat, I concede that "agreements and their 'titles' are being misused thus causing much confusion". I am not an expert and I never needed to think about "hold harmless agreements" and "written agreements" until the IRS created these new regulations. Pat, the agreement I am speaking of "incorporates the language used in an ISA" so calling it an ISA is not far off the mark. While I understand the need for getting the name right, please do not lead people to think they can contribute to vendors that do not sign the new agreement. Whatever the name for it, some type of paperwork needs to be signed in order for vendors to be available. AND Due to the new regulations which take effect on January 1, 2009, Vanguard and Fidelity may not be available for many. I am lucky. Omni and Fidelity have worked out their difference and Vanguard has also signed WHATEVER NEEDS TO BE SIGNED and they are on the list as well. So instead of facing complex annuities which are jammed with hard to understand fees, and mutual fund companies that charge front end loads and excessive fees, teachers at approximately 600 school districts in New York state will be able to invest with the no front-end load and low fee funds of Vanguard and Fidelity. Of course, this is only if Vanguard and Fidelity are on the list. So, if they are not, talk to whoever is in charge and politely ask that they be added so that teachers have a variety of investment providers to choose from.
  5. Pat, What is your source on this: "One of the biggest myths and points of confusion out there is that an ISA needs to be signed by a plan approved vendor. That is absolutely not the case."? I spoke with the IRS and a "tax specialist" told me that an ISA needs to be signed by a plan approved vendor in order for contributions to be made post Jan 1, 2009. -Dave
  6. So now my district has to sign a Record Keeping Agreement with Fidelity. All of that worry about the ISA - and it was only step one. I hope they do this. Vanguard has signed on - just today - with Omni. I do not yet know if they require a Record Keeping Agreement.
  7. Fidelity has signed the ISA with Omni. This is great news for all 600 or so (mostly) New York State schools who use Omni. Make sure your district adds Fidelity as a choice if they haven't yet! Vanguard's participation remains to be seen...
  8. Fidelity has signed the ISA with Omni. This is great news for all 600 or so (mostly) New York State schools who use Omni. Make sure your district adds Fidelity as a choice if they haven't yet! Vanguard's participation remains to be seen...
  9. I recently spoke with a NYSUT rep. According to her communications with Omni (which primarily does business in NY as a TPA), Fidelity and Omni have very little keeping them from working together. She used the phrase "cautiously optimistic". Vanguard, on the other hand, only began answering calls from Omni very, very recently. Their first meeting was Tuesday, Nov 25, 2008! So, it looks like, if it happens, Vanguard will be late to adapt to these new regulations. Thankfully Fidelity is working to get this done. I sent a letter to Chairman of the Board Johnson and I received a letter from his assistant. My feedback was passed along to the "proper executives". Vanguard replied to my letter with a nice letter, but it was written by a Vanguard "registered representative" and it stated in no uncertain terms that Vanguard would "not be able to review, interpret, accept, or sign any" ISA. They have theirs and that is what districts or TPAs need to sign if they are interested in doing business with Vanguard. If your district uses Omni, and you are hoping for a "no-load", no "12b-1" fee fund company, search the vendors who have signed with Omni at other schools. You can find lists at www.omni403b.com. If you find good ones, post here so we can share and try to improve our lot. I know of two whose prospectuses show they are no-load funds with no 12b-1 fees as well. They are American Century and Lincoln Investors. Good luck.
  10. American Funds have solid performance, but also front end loads of 5.75%. Same with Oppenheimer. The rest sound like they are selling variable annuities which are packed with fees. But you need to do the research. It is worth the time. Start with websites and then send emails and make calls. You want to see the fees page on the prospectus for any fund. Funds with no front end loads and no 12b1 fees are the way to go if you have the option. I know of one TPA that charges about $40 per enrolled investor. Good luck.
  11. My district offers a few different options. ING is one. They only offer variable annuities for us. These are packed with hidden fees and high fees. An IRA may be a good choice if your AGI isn't so high that you can't get a deduction. Here is a simple calculator to tell you which IRA you can use and how much is deductible: http://www.smartmoney.com/personal-finance...a-options-9563/ Here is the IRS page with more details: http://www.irs.gov/publications/p590/ch01.html#d0e1452 You can buy an IRA with Vanguard or Fidelity or one of the other low fee, low expense fund companies. Also, push your district (get others to join you) to add a low cost option like Fidelity or American Century.
  12. dpww13

    Vanguard 403b

    Frozen means you can't contribute more money, but it can keep growing with low expenses and minimal fees. I will leave my money in the Vanguard frozen account.
  13. I am in the same boat. Confidential Planning-Smart Choice seems to be the least evil of all evils. For my district they take 0.75 and their bank takes 0.15. So you pay 0.90% above the expenses of the funds you buy through them. The reason why I believe they are the best of the choices I have is because all of their funds are no load and there are no other fees at all... well except for the annual custodial fee, but that disappears when you have a certain amount in the account, and even Vanguard charged me a similar fee. Other fund companies, like Oppenheimer, have a 5.75% front end load and high fees. At least with Confidential Planning-Smart Choice you can buy Vanguard 500 for 1.05% (0.90% + Vanguard's 0.20%). I plan on either buying the T Rowe Price Retirement = 1.64% total expenses or the Vanguard 500 = 1.05% total expenses If I go with T Rowe 2040 Target Date - I am nice and aggressively diversified (which I like, being in my 30s) If I go with Vanguard 500 I will get foreign exposure through a Roth IRA outside of the 403(b). What a headache! Write letters and try to get the IRS to change the law to allow us real freedom to choose. Good luck, and good night.
  14. Thanks jyork I will see if they are willing to work in New York and then BEG my business office.
  15. Does anyone know a third party administrator that will sign Vanguard's ISA? Or has anyone's public school district not used a third party administrator and just signed on with Vanguard and Fidelity? My district uses Omni and they refuse to sign fund company ISAs. I want to use Vanguard or Fidelity or any other no load fund company. As of right now, only the load bearing fund companies have signed on with Omni. Confidential Planning is an exception to this. I can get low expense funds (Vanguard's 500 index fund for example) from Confidential Planning. But they do charge 0.90% (.75% + .15%). So with no load I will be paying over 1% for a 0.20% Vanguard fund that I used to get for 0.20%. Without a third party administrator I will be left with no choice.
  16. Please, spread the word. Use the sample letter below and your own experiences and send letters to your state representatives and Senators. Send letters to the IRS, your teachers’ union, Money Magazine, and any other organization or person you think can help us. ............................................................................................................................................................. Updated December 15, 2008 - I changed Information Sharing Agreement to agreement - I believe I was wrong in calling it an ISA or Information Sharing Agreement, but it is essentially the same thing just with a different name. ............................................................................................................................................................. I am very concerned about the recent changes in 403(b) rules. They will be devastating for the teachers, church employees, and other non-profit employees throughout the nation. Here is why: the new regulations are scaring away the best investment providers. Here is the situation, as I understand it: • Under the IRS’s “Revised Regulations Concerning Section 403(b) Tax-Sheltered Annuity Contracts” as of January 1st, 2009 all non-profits must enter into a written agreement with all vendors. • So far, the companies that have signed on with the new employer are the high fee, high expense providers. Many have hidden fees and penalties. • Several larger vendors (and all of the low fee ones such as Vanguard and Fidelity) have, so far, refused to sign the agreements. According to a phone conversation with an IRS “tax law specialist,” on October 24th, 2008, many vendors don’t want to deal with these new very strict rules so they have pulled themselves out of the 403(b) business. • Vanguard phone representatives state that employers would have to sign Vanguard’s agreement. • Apparently employers will not sign the agreement of any company because they do not satisfy requirements in terms of indemnity. There are millions of workers in non-profits, including churches and schools, throughout the country who will potentially lose the opportunity to invest with the large, low-fee vendors. The loads, fees, and expenses of the other vendors are extremely high. Workers in non-profits throughout the nation who were supposed to be protected by these new requirements are going to be severely hurt by them.
  17. I teach in New York State and my school uses Omni. I was concerned about Vanguard and Fidelity not being available on and after Jan 1 2009. This will likely and sadly be the case. The story from Vanguard is that they have their own information sharing agreement (isa) and it is easier for everyone if the schools simply sign it. The story from Omni is that Omni's agreement protects the teachers and Vanguard. Omni's isa has something called imdemnity for both parties. That is where my eyes glaze over and I begin to get angry with the politicians and/or IRS regulators who changed the 403(b) law. Now I (and I assume millions of teachers throughout the country) may be left with providers offering loads, high expenses, hidden expenses, and worst of all... variable annuities. I may just stop investing though a 403(b) and use a Roth IRA. The minimum is $5000 for 08. It's just under what I did with the 403(b) anyway.
  • Create New...