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  1. Disclaimer (just in case I'm not anonymous enough): I won't be using the sole advise of an online discussion board to make a binding decision for my organization. This is simply part of my research and due diligence as an administrator in determining what potential courses of action are feasible and worth presenting to our attorney for review and official opinion. Cheers!
  2. Excellent replies, guys! Thanks! This is great because it generally confirms my initial suspicions. I can understand Vanguard's position on signing and reviewing myriad custom ISA's. I can't imagine that the sample service provider agreement on this site looks very attractive either-- obligating the provider to supply advisers (salesmen) and investment advise to individuals. NOT doing these things is exactly why Vanguard can offer cheap products, and exactly why it's attractive to self-sufficient investors. Liability-wise, it seems more likely that an organization would be more susceptible to employee lawsuits by NOT providing decently priced investment options (something 403(b) regs already required- due diligence, interest of the employee etc. etc.), and is one of the reasons I'm working on this project; even if that means taking on more 'risk' by not having the protection of your own customized ISA. In the long-run, if you can show you've given an employee the opportunity to make good decisions its worth being liable for any technicality that may arise over mistakes in plan administration. Which risk is greater? Anyone have statistics :)!? Additional note: Vanguard doesn't allow vesting. That might kill the whole thing, as we match our employees contributions and have a stepped vesting schedule. I'd love to find a way around that one. Thanks again for all the comments. I feel your pain in the public sector. (quick story: Many moons ago in a different life I was a green financial (sales) advisor who sold a 403(b) annuity to his MOM who is a teacher. My mentor at the company I worked for encouraged it, sales-support told me it was the best option and I didn't question it. I made a good commission and thought I had done a great service to my mother. Guess I have some apologizing to do over Christmas)
  3. Okay, I've been reading this board for a few weeks now and I think it's time to ask for some clarification on why the new regs. have caused Vanguard to drop from so many 403(b)'s (or did the plans drop them?) ...yeah, I'm confused. For some background: I'm a plan administrator and I've been really dissatisfied with the annuity product we have with Valic. After doing my homework over the past few months (and reading this board) I'm thoroughly convinced and eager to offer some low-fee investment options for my employees; hopefully through Vanguard or Fidelity. I've finally got the green-light to put a proposal together, and lots of employees are eager for other options. As I understand the new regulations, there's not much of a hurdle to doing this, aside from some additional administration for my company as the plan administrator. We don't work with a TPA (yet). So a few questions: 1. What am I missing? Why does it seem like so many plans are dropping vanguard? Is it issues with TPA's that don't necessarily effect us? 2. Am I overlooking some huge regulations or administrative burdens that would make adding Vanguard as a 403(b)7 provider less than attractive? (All of the forms on Vanguards website are pre-signed so it seems like they're eager for 403(b) business) 3. I understand that the responsibility will be on us as plan administrator to manage contribution limits, etc. What am I missing? Should we be using a TPA when adding this layer of 'complexity' to the plan? Thanks, gang. Steve
  4. Okay, I'm going nuts trying to figure out the best solution for my employee. I hope this is the right place to post. We had an employee relocate to New Jersey recently, and we can't figure out a good solution for tracking the deferred state income portions (from before the move) and all the new NJ-taxed income that is contributed in the future. I guess the first question is 'Is it necessary to keep the funds separate?'. I'm not sure what the exit consequences are for qualified distributions. Are they subject to NJ state income tax again? That wouldn't seem right which is why I'm assuming it will be necessary to separate the funds. Despite many phone calls, I've received no help from our plan provider. The employee's tax-consultant told them to have us contact the plan provider. And finally, the plan provider tells us to tell the employee to contact their tax-professional. Damn, frustrating. I don't want to make assumptions about what the right answer is, I just want some of these professionals to help me think about it logically! Any one have ideas? Thanks, Steve
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