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Ray_CSU

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  1. Fidelity is one of our options under the new California State University plan for 2009. The choice of funds is now limited to 19 (counting the Freedom Funds as one fund), down from about 150 funds previously offered. Of the 19, only 8 are actual Fidelity funds; the others are funds managed by other companies availabel through Fidelity. I previously was investing in 5 funds: Fidelity Low-Priced Stock Fund, Fidelity US Bond Index, Spartan International Index and Spartan Total Market Index. The only one still available is the Low-Priced Stock Fund. I am thinking that I'll transfer my current balance from the Low-Priced Stock Fund into the others, and then start contributing to the Low-Priced Stock Fund all over again. I'll also likely choose one of their Freedom funds. I would consider some of the offerings Fidelity has from Pimco and Vanguard, but I think I'd end up paying higher fees if I went that way. Here is the first part of the 8 page memo from Fidelity. The rest mostly lists the fund options that are going away. Note that they say that if you do not specify which of the new funds you want going forward that your new contributions will go to one of the Freedom Funds, based upon your age and expected retirement date. Memo from Fidelity- December 5, 2008 Re: Important Information Regarding Your California State University Tax Sheltered Annuity Program Dear California State University TSA Participant: Effective on January 1, 2009, the California State University (CSU) Tax Sheltered Annuity (TSA) Program investment lineup will include new investment options and will be streamlined to a core investment lineup. As a CSU TSA participant, you may have completed the initial enrollment process via Retirement Manager by directing a portion of your salary to the CSU TSA Program at Fidelity beginning January 1, 2009. The following information provided will assist you in selecting investment options available in the new CSU core lineup offered through Fidelity. Please note because January 1 is a holiday, January 2 is the first business day to make investment choices. • Please review your current investments and compare to the new CSU core investment lineup listed below. You may currently be investing in one or more of these funds that will continue to be part of the CSU core lineup effective January 1, 2009. If you are satisfied with your choices and they are part of the CSU core lineup, no further action is required. • If you are currently investing in a fund(s) not available in the new CSU core lineup (see frozen funds chart on page 2), you will need to redirect future contributions to investments in the new CSU core lineup by the close of the market (generally 1:00 p.m. Pacific time) on January 2, 2009, or future contributions will default to one of the Fidelity Freedom Funds® (see the default fund chart on page 4). If you miss the January 2, 2009 date, you have the option of designating future contributions to a fund within the new CSU core lineup and making an exchange of funds from the default fund at a future date. • You have the option of maintaining your existing account balance(s) in frozen funds or you may make an exchange to an investment in the new CSU core lineup on or after January 2, 2009. • Effective as of the close of the market (generally 1:00 p.m. Pacific time) on December 31, 2008, no exchanges will be permitted into a frozen fund. CSU core investment lineup Allianz NFJ Dividend Value Fund - Administrative Class* Allianz NFJ Small-Cap Value Fund - Administrative Class* American Century Real Estate Fund - Investor Class* Fidelity Balanced Fund Fidelity Freedom Funds® Fidelity Fund Fidelity Growth Company Fund Fidelity International Discovery Fund Fidelity Low-Priced Stock Fund Fidelity Retirement Money Market Portfolio Fidelity Small Cap Stock Fund ING Stable Value Account* Janus Mid Cap Value Fund - Investor Class* Morgan Stanley Institutional Fund Trust Mid Cap Growth Portfolio - Class P Shares* PIMCO Real Return Fund - Administrative Class* PIMCO Total Return Fund - Administrative Class* Spartan® U.S. Equity Index Fund - Investor Class The Hartford Small Company Fund - Class Y* Vanguard Long-Term Bond Index Fund - Investor Shares* *New investment option available 1/2/2009. Please see the investment option descriptions in the About Your New Investment Options section of this letter for the new funds being added. You can also view an electronic version of this document by logging onto Fidelity NetBenefits® and navigating to Plan Information and Documents. 511917.1.0 Page 1 of 8 You can also view an electronic version of this document by logging onto Fidelity NetBenefits® and navigating to Plan Information and Documents. 511917.1.0 Page 2 of 8 Now may be a good time to review your current investment options to make sure the current investment objectives are meeting your goals. Please review this guide to learn how these changes may impact your future contributions and existing account balances. We encourage you to contact Fidelity by the close of the market (generally 1:00 p.m. Pacific time) on January 2, 2009, to direct how you want your future CSU TSA contributions invested; otherwise, if your current investment allocations are not directed to a core investment option, your future contributions will be defaulted to the Plan's default fund. Please call Fidelity at 1-800-343-0860 or log on to Fidelity NetBenefits® to direct your future contributions to the CSU new investment lineup.
  2. Thanks to everyone for your replies! I will have to carefully read the prospective of any offering to find out for sure what fees are going to be charged. These companies are in it to make money just like anyone else,and are selling a product, so it's best to beware. John, this rep told me that the CSU had a Committee that chose the funds, and that ING had offered them about 1000 funds but the Committee only chose 20 or so. As you said, they supposedly wanted to keep things simple. I thought maybe it was because there was more administrative work involved with more funds, but he said that wasn't the case. I think we are really being done an disservice with these limited choices, especially as they aren't offering any low cost index funds, or very few anyhow. Before I had Fidelity US Bond Index, Spartan International Index and Spartan Total Market Index; those are no longer available. I am thinking that I'll probably go with one of the Fidelity Freedom Funds, which are target date type funds. They also ofer the T. Rowe Price target funds (via AIG), some Target-Year Lifestyle funds from ING, and the American Funds Target Date Retirement funds from MetLife. However, I expect that when I do my full research I'll discover that I have to pay higher fees to invest in those funds, as opposed to just going with the Fidelity target funds. That's a very good point! With an actively manged fund you not only pay for the managers 'expertise' but you also have the additional costs incurred by that manager buying and selling stocks. With an index fund you also will have commission costs, of course, as the stock mix is adjusted to reflect the market that the index represents, but my understanding is that there is much less stock churning going on, and thus less fees being charged. If employers truly want to make things simpler regarding our choices, I would think that offering a good assortment of index and retirement target style funds would be the way to do it
  3. Ok, no reply to my earlier post, maybe it was too long for people to read, or the advice I sought just isn't available here. Anyhow, I have another question so I am trying again. Our new 403b plan offers five sponsors: AIG, ING, Met Life, TIAA-Cref and Fidelity. From all I've read here the first 3 are to be avoided, as their fees are higher. However, I just spoke to a rep hired by ING to field questions from customers, and he said there fees are the lowest amongst that group. I had specifically asked whether they charged extra fees and he said no. He used Fidelity Contrafund as an example, and pointed out that the retail fee for Contrafund is .89%, whereas they only charge .65%. I then asked how they made their money then, and he said ING splits the .65 with Fidelity. I then said that isn't it true that 403b contributors actually pay less than the .89 retail and he agreed that is true. He said it's because the money is "stickier", meaning that 403b investors tend to leave their money in their accounts longer. I don't recall exactly what Fidelity charges and he didn't mention that figure. I do still have some money in Contrafund from years ago, although I stopped investing awhile back when I decided to become more diversified. I wouldn't mind investing in it again if I thought I could do so without paying extra expenses. Likewise, I wouldn't mind investing in the Vanguard Long-Term Bond Index, which is to be available via Fidelity. Somehow though it just seems like there has to be a catch, and I am wary of investing in a fund only available from someone else. So, what's the real story on these expenses? I don't want an annuity; I want to invest in mutual funds without paying any more than I have to.
  4. The impending changes in 403(b) choices for 2009 have got me really looking at my investing options, which of course are much more limited than before. As a CSU employee I still do have access to Fidelity and TIAA-CREF, so perhaps I shouldn't complain, but even so the actual mutual funds available are far fewer than before. As to the various annuities being offered, I may not be an expert yet, but I at least know that is not the direction I want to go in. I have never considered a Roth TSA before, as it seemed to make more sense to use the 403(b) option and invest pretax money. My monthly contribution to my 403(b) has been pretty nominal over the years, only $100-$200 until the last couple of years, when I increased it to $850 a month. Thus, I do not have much saved in this retirement account, and it is a small part of my retirement plans, as I'll be mostly relying on my pension. Still, I want to build it up as much as I can during the next 3 years or so before I retire. I have been investing with Fidelity, in the following funds: FID CONTRAFUND (no longer contributing to this one, but keeping what I have there) FIDELITY LOW PR STK (20%) FIDELITY US BD INDEX (10%) SPARTAN INTL INDEX (20%) SPTN TOTAL MKT INDEX (50%) I added the last 3 index funds about 2 years ago; before that I was fairly aggressive (and not very diversified) and just contributing to the Contrafund and Low Price Stock funds. Fortunately, they have both done fairly well over the years. The percentages following each fund is the percent of my total monthly contribution that I am currently investing. Of those funds, the only one still being offered by Fidelity as of 2009 is Low Price Stock fund. That bothers me, of course, as I had put some thought into my mutual fund choices, and was comfortable with what I've been doing. The funds available via Fidelity for next year are: Allianz NFJ Dividend Value Fund- Admin Class Allianz NFJ Small-Cap Value Fund- Admin Class American Century Estate Fund- Investor Class Fidelity Balanced Fund Fidelity Freedom 2000 - 2050 Funds Fidelity Fund Fidelity International Discovery fund Fidelity Low-Priced Stock Fund Fidelity Small Cap Stock Fund Fidelity Growth Company Fund Janus Mid Cap Value Fund- Investor Class Morgan-Stanley Institutional Fund Trust Mid Cap Growth Portfolio- Class P Shares PIMCO Real Return Fund- admin class PIMCO Total Return Fund- admin class The Hartland Small Company Fund- Class Y Vanguard Long-Term Bond Index I also have the following mutual funds available via TIAA-CREF: American Funds EuroPacific Growth R4 American Funds Growth Fund of America R4 Columbia Small Cap Value I Z Dryden Small-Cap Core Equity Z Eaton Vance Large-Cap Value I First American Mid-Cap Value Y Lazard Emerging Markets Open Lazard Mid-Cap Open Munder Mid-Cap Core Growth Y T. Rowe Price Capital Appreciation TIA-CREF Small-Cap Blend Index Wells Fargo Advantage Small-Cap Growth A I'm not bothering to list the annuity offerings, as I have no interest in those. I have a few questions (for anyone who is still reading all this!) 1) I am considering opening a Roth TSA with Vanguard, so I can invest in their index funds as I have wanted to do all along. I am in a 15% tax bracket so I don't think that I am losing that much by investing after tax dollars vs pretax dollars via my 403(b). Make sense? The funds I am considering there are: Total Stock Market Index Total International Stock Index Total Bond Market Index Vanguard REIT Index Fund Investor Shares Vanguard 500 Index Fund Vanguard Small-Cap Index Vanguard Long-Term Bond Index I obviously would have to narrow that list, as I could not initially invest in all of them at once. 2) I notice that the fund sponsors that the CSU is making available for 2009 often offer funds that are actually from another mutual fund family. For example, I can get the Vanguard Long-Term Bond Index from Fidelity through my 403(b), if I choose to do so. I am a bit wary of doing that though, as I assume that I would be paying extra fees. So, am I correct in thinking that I should avoid doing that? 3) I am undecided about what to do about my 403(b) at this point. They say I need to reenroll this month to keep my monthly contributions being invested. I am starting to think I should just wait until next year and enroll again then. I have read that the IRS is considering delaying the new rules, and also it seems like the CSU may be offering more investment options at a later date. They haven't said that in writing anywhere, but something to that effect was said in one conversation I had with them. So, I am thinking that perhaps I'll hold off until the 'dust' settles, and just set up a Roth IRA for now. (Note- the CSU does not offer a 403(b) Roth). Some facts about me: 15% tax bracket About 3 years from retirement Not likely to need my retirement funds right away, and actually would like to keep investing even after retirement (via a Roth) Ok, so this is a ton of info, and I'm obviously asking for some advice regarding my investment options. I don't know if anyone here offers such specific advice; actually I'll be amazed if people actually read all thhis and reply! But, it doesn't hurt to ask, I guess. TIA, Ray
  5. I'd post it if I had it, or could find it, but they have not sent it to the employees and the CSU web site has not been updated since the agreements were reached- http://www.calstate.edu/hr/benefitsportal/...3b_impact.shtml If you look at the last sentence in the first paragraphh under New Regulations, it says "... no information sharing agreements exist." Here is the link to where they mention the new fund sponsors as of 2009: http://www.calstate.edu/hr/benefitsportal/tsa/
  6. Hi, I'm new here and haven't finished looking around yet, so hopefully this post isn't redundant or otherwise inappropriate. I work for the California State University and have had a 403(b) for many years, with Fidelity as my investment choice. I'm bothered by the upcoming changes like everyone else, and I certainly don't want to invest through an insurance company. However, it appears that CSU employees may have it better than many of you, as we still have Fidelity as an option, even though the list of available funds is pretty limited. I mention this not to make anyone feel bad, but because I saw a post where someone recommended that Fidelity be contacted and asked why they didn't sign an agreement (ISA). I thought people might like to know that they did sign an agreement with the California State University. Our choices come next year are: AIG, Fidelity, ING, MetLife, and TIAA-CREF. I plan to stay with Fidelity, but the problem is that onlyy one of the five funds I currently use are going to be available. I need to research the new 'offerings' and decide which, if any, to go with. Does anyone else have any investment options, other than annuities via life insurance companies?
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