Jump to content


  • Content Count

  • Joined

  • Last visited

Posts posted by bigred

  1. Update

    CalSTRS responds to my message:


    Dear Mr. Schullo:

    Your anger is understandable, with layoffs and budget cuts becoming a depressing norm these days. But please note that maximizing the value of the teachers’ retirement fund, and doing it in a transparent and ethical way, are top concerns of everyone at CalSTRS.

    Decisions on compensation are made in public meetings and are the purview of the Compensation Committee of the Teachers’ Retirement Board (TRB). The committee meets several times per year, most recently in April 2009 and before that in November 2008. You can see what they’ve done by visiting our TRB Public Meetings and Agenda’s page online at: http://www.calstrs.com/publicdocs/Page/Cal...blicBoardAgenda .

    On these pages you will find full disclosure of our incentive compensation recipients, discussion of the latest policy changes and of our look at how compensation has been calculated along with a study of how to best proceed.

    CalSTRS competes with the private sector and other public pension systems for qualified staff. CalSTRS salaries therefore reflect data compiled from both areas and are tied to performance.

    And because CalSTRS is a long-term investor, its compensation system looks at the investment performance over three years to avoid the pitfalls of short-term thinking. The latest incentives were given for performance from July 2005 through June 2008. During these the CalSTRS portfolio generated a 9.7 percent average annual return, beating its benchmark by 1.9 percent.

    This speaks to the value our staff has added to the portfolio over the past three years. Their decisions added $2 billion to the portfolio over the last three years, dwarfing the nearly $3 million paid out in incentive compensation.

    Even with incentive compensation packages, CalSTRS investment staff are far more cost effective than outside managers. As a rule, internal management costs one-tenth of external managers. For instance, in fiscal year 2007-08, our internal managers cost $14.3 million while external management cost $196.2 million.

    Thank you for your questions and the opportunity to provide a fuller picture of the CalSTRS incentive program than was provided in the recent article and editorial in the Sacramento Bee.

    Cassandra Lichnock

    Director, Human Resources


    (916) 229-3810




    Can you get them to provide you with exactly what their benchmark is? I think that is probably the problems come from. They need broad, equity, bond, real estate and ect to truly diversify a portfolio like that and if they are benchmarking to the S&P 500 that would cause too much to be allocated to equities.


    On the previous post, just because you work on "the street" and work long hours do not equal a big paycheck. I would hate to compare the hours put in by my wife who teaches Spanish, is a coach for both Cross Country and Track.


    Too much entitlement is not a good thing.

  2. I'm not familiar with a 401 K setup. Who helps the plan participants pick their funds? IF they have advisors here is proof they aren't doing their jobs. If they don't have advisors and are just picking funds on their own that just shows how ignorant we are on finances.









    My experience was they hand you a packet of info on how much you want to invest and how you want to elect it. From there on it was your own best guest with no guidance, quarterly statements is about it.

  3. Hi geek,

    Right on!

    I keep forgetting that most people are working and not eligible for 403b to an IRA rollover to purchase ETFs.

    I was using this link as an example of a low cost portfolio using Vanguard. You might add that most teachers do not have Vanguard as a direct choice but cannot transfer money to VG either! Many thanks the new regs that "threw out the baby with the bath."


    However, if a working teacher is over 59.5, they can execute a 403b to an IRA rollover and transfer money to Vanguard or any vendor not in their plan.

    Thanks for the clarification,




    What about a district where the plan doc does not allow for the transfer out of funds until you create a separation of service, per the TPA's attorney?

  4. The Barron's article ranking the mutual fund families is now out. This is a great way to check out the fundfamilies and see how the funds you have compared to others. They have rankings for 2008, a 5 year and 10 year. Many of these fund families can be found offered in 403b's and 457b's.


    Noteables for 2008 Waddell & Reed #5 (they have alot of FL 403b participants), Vanguard #7, TIAA #30, AIG #47



    could you post a link to the article.

  5. BigRed, Our district just submitted IPSA and Plan Documents to see if they will comply..... I was just wondering, if they DO comply, what funds, out of the 20,000 that they advertise, would be available to our district? My concern is that only funds which are high cost would be available.


    So, who chooses what funds will be available? Im assuming the School District? If this is the case,

    Would Vanguard or Fidelity be options, If they werent able (independantly) to sing our documents (thats to say, Fidelity was removed from our vendor list, would 403basp be able offer these?)

    Thanks for your efforts.

    Is that link you listed 403basp pending districts?


    Yeah I think those are ones they may have looked at and some are up and running.


    Who chooses what is available? That is the TPA and school district and any advisor who has got his foot into the door. You might have to sell that you need Vanguard as much as that guy sells that he needs American, Oppenheimer, ect.


    You would have I think almost all of Vanguard's and Fidelity's funds available, just might have some plan minimums. It is a pretty good option and should cover most people even if they want an advisor.

  6. BigRed,


    Thanks, I am Middletown Board of Ed. Monmouth County, NJ


    I don't see your district listed anywhere. Go to




    click on 403b document center


    select new jersey


    then look through the list of districts for possiblities, maybe yours is on there under a different name. One I looked at in NJ is just American Funds.


    Hope that helps.

  7. Hi Tony,

    So by implication, companies will earn less, dividends go down more, stocks will not grow as much as they did in the last thirty largely because of all the borrow and spend frenzy, investments will ONLY grow the ole fashion way, up about 6-7% per year with little or no trading volatility! Wow, it’s a shame that the days of "gaining" double and triple digit performances, and then losing it all, may be hopefully over.

    My 2 cents,





    Look at the dividend yields right now. We are at a level we have not been at in 17 years, yes I expect divi's to go down some but it has become a bigger portion of the pie.



    Year Earnings Yield Dividend Yield S&P 500 Earnings Dividends

    1960 5.34% 3.41% 58.11 3.10 1.98

    1961 4.71% 2.85% 71.55 3.37 2.04

    1962 5.81% 3.40% 63.1 3.67 2.15

    1963 5.51% 3.13% 75.02 4.13 2.35

    1964 5.62% 3.05% 84.75 4.76 2.58

    1965 5.73% 3.06% 92.43 5.30 2.83

    1966 6.74% 3.59% 80.33 5.41 2.88

    1967 5.66% 3.09% 96.47 5.46 2.98

    1968 5.51% 2.93% 103.86 5.72 3.04

    1969 6.63% 3.52% 92.06 6.10 3.24

    1970 5.98% 3.46% 92.15 5.51 3.19

    1971 5.46% 3.10% 102.09 5.57 3.16

    1972 5.23% 2.70% 118.05 6.17 3.19

    1973 8.16% 3.70% 97.55 7.96 3.61

    1974 13.64% 5.43% 68.56 9.35 3.72

    1975 8.55% 4.14% 90.19 7.71 3.73

    1976 9.07% 3.93% 107.46 9.75 4.22

    1977 11.43% 5.11% 95.1 10.87 4.86

    1978 12.11% 5.39% 96.11 11.64 5.18

    1979 13.48% 5.53% 107.94 14.55 5.97

    1980 11.04% 4.74% 135.76 14.99 6.44

    1981 12.39% 5.57% 122.55 15.18 6.83

    1982 9.83% 4.93% 140.64 13.82 6.93

    1983 8.06% 4.32% 164.93 13.29 7.12

    1984 10.07% 4.68% 167.24 16.84 7.83

    1985 7.42% 3.88% 211.28 15.68 8.20

    1986 5.96% 3.38% 242.17 14.43 8.19

    1987 6.49% 3.71% 247.08 16.04 9.17

    1988 8.20% 3.68% 277.72 24.12 10.22

    1989 6.80% 3.32% 353.4 24.32 11.73

    1990 6.58% 3.74% 330.22 22.65 12.35

    1991 4.58% 3.11% 417.09 19.30 12.97

    1992 4.16% 2.90% 435.71 20.87 12.64

    1993 4.25% 2.72% 466.45 26.90 12.69

    1994 5.89% 2.91% 459.27 31.75 13.36

    1995 5.74% 2.30% 615.93 37.70 14.17

    1996 4.83% 2.01% 740.74 40.63 14.89

    1997 4.08% 1.60% 970.43 44.09 15.52

    1998 3.11% 1.32% 1229.23 44.27 16.20

    1999 3.07% 1.14% 1469.25 51.68 16.71

    2000 3.94% 1.23% 1320.28 56.13 16.27

    2001 3.85% 1.37% 1148.09 38.85 15.74

    2002 5.23% 1.83% 879.82 46.04 16.08

    2003 4.87% 1.61% 1111.91 54.69 17.88

    2004 5.58% 1.60% 1211.92 67.68 19.407

    2005 5.47% 1.79% 1248.29 76.45 22.38

    2006 6.18% 1.77% 1418.3 87.72 25.05

    2007 5.62% 1.89% 1468.36 82.54 27.73

    2008 7.24% 3.11% 903.25 65.39 28.05


  8. elgordo,


    Thansk for your experience, I think you are the only one on here that is an active participant in this vendor, is this safe to say>? When our vendor list changes about 3 weeks ago, I reached out to all existing and new vendors and the response time was pathetic to non-existent. What a mess. If I can just determing how funds are slected for districts under 403basp as provider, and could establish that there will be low cost index funds via Fidelity or Vanguard, I will not need to have the ability to talk to anyone right away. Just "set it and forget it" (aside from rebalancing which is not on my schedule if I choose a simple Vanguard Target Retirement Fund)


    What district are you under sullivanke? I may be able to help you out or point you to someone.

  9. Hi Scotty,

    There was this guy I have been reading about that promised 12%: however, I understand you to have to know someone to get in. Maybe you can check that out for me. Here is someone who invested with that guy: http://www.philly.com/philly/hp/news_updat...rags_story.html


    Best Wishes,




    There's way to much of this going around right now. Really kinda makes a person wonder.



  10. Bigred,

    Sure, I totally agree that this is a pie in the sky. Its interesting the reaction to this proposal. Mr. B values have always been with the ordinary investor and NOT with Wall Street at all. This proposal is a reflection of his values. The other guests can be heard gasping because they are traders, not individual investors like us. This was music to my ears. The difference in investment values between Mr. B and the other CNBC guests was staggering, but not surprising. (did you see the v i d e o clip?)


    I personally get validated because Mr. B's values are my values on money, quality of life, buy, hold and rebalance occasionally, have my bond ratio equal to my age plus 10, and of course, STAY THE COURSE. Bogle is not the only person who advocates these strategies, Bernstein, Ferri, Swedroe, Graham, Bogleheads, and to a large extend WB. The result is that I enjoy my retirement. These are very boring strategies that will never resonate with 99.9% of the financial industry. Result: my portfolio is only down about 15%, but I know the equities portion will recover because A. They are indices and, B. related to A, the stock market will recover eventually and the indices will rise, guaranteed. It’s pretty simple when one can ignore the noise all around us during good times and bad.


    You know as well as I do that there is a reason why not very many mainstream networks ask Mr. B to share his views. I turn on CNBC to be entertained, it’s never been a place to get investment information because its mostly about short term get rich schemes, trading everyday, buying individual stocks, predicting the future and acting on a prediction, Obama administration effects on the stock market and which companies will benefit the most from the infrastructure stimulous package, etc, sorry buts its ALL investment p o r n and Mr. B. doesn't value it either. I personally never take anything seriously on CNBC.


    Sorry for the long response. I am so excited about our new president.

    Have a good day,






    No I did not see the clip, do you have a link anywhere for it? John Bogle really has everyone's best interest at mind and I really respect that. I agree in principle with the Bond Ratio except I think it needs to be tweaked the other direction for a larger equity base(I am young). I don't know if you've read WB's new biography but I love it when he says his favorite holding period is "Forever". Yup pretty boring.


    I also agree on CNBC for entertainment. I like to watch Cramer then switch over to Jimmy Kimmel. I value both of them for the comedy. I do think that we will become friends.


  11. Hi all,

    I was tickled pink listening to Mr. B. talk about the seriousness of the economy on CNBC. Nothing new about that, BUT he had a couple of solutions. After lamenting about what was in those bankers heads when they took unbelievable and unsustaining risks, he proposed a tax on speculative transactions. The reaction by the other guests who are all Wall Street traders was hilarious. Mr. B ethical standards are great but when he is around the usual Wall Street crowd on CNBC, you can get a vivid sense on how ethical this man is. He is head and shoulders above, way above, all of those sales pundits.


    Full Interview, click on "move" and look for "Outlook for the O-conomy" January 20, v i d e o clip.





    The only person I respect more than John is Warren Buffet but I think this may be a little pie in the sky. The way it seems to me is that a farmer who would hedge his commodity would be taxed higher on that portion of income, unless I don't comprehend what is proposed. I would rather see an end to the "SPE's" to get rid of the "off balance sheet liabilities."

  12. Tony,


    Thanks for the info. I haven't yet seen what the fees are going to be for the TPA, or if the American Funds offered by the Capital Bank and Trust have any hidden fees as well.





    You might want to see what share classes are available for American if they have their r-4 or r-5 classes available these are very cheap versions of those funds.


    If you have any questions I can try to help.


    Your ed jones rep is not going to get you any vanguard(no compensation) that you are looking for. They will mostly be American Funds r-3 shares and franklin templeton shares of expense ratios between 70-90 bps. If ASP is already a vendor in the district I would push for them to open up all funds so you can have all no-load choices you can imagine.



    As a matter of fact, those were indeed the two fund families that he mentioned the other day. The paperwork lists about twenty funds he wants to sell, then says that the client can add up to 5 more funds. Not sure what the possibilities are for those other funds. If it is the full 403b Fund Source list, there are some, but not all, Vanguard funds available.


    I am still investigating whether the straight 403b ASP Fund Source is an approved vendor for my district. Or if the plan (with my district's name) as listed on their website is there only because it is an orphaned account.





    Some districts have only "approved" the 45 plus 5 list offered by the ed jones agent. If your district is using 403basp already I would talk to someone in your business office to get all of ASP's offerings available. If you pm me and let me know what district you are in I might be able to help.

  14. My district lost Fidelity and Vanguard and T. Rowe Price. Our new approved list has a local Edward Jones rep who is offering a connection to 403bASP's Fund Source. He signed the plan documents prepared by CPI, as our TPA.


    I asked him how he was paid, if he was just going to add yet one more layer of fees between me and my chosen funds. He says, no, he gets paid by [revenue sharing?] his company getting about 50% of the listed expense fee for the fund, and then him personally getting 40% of that. (The fund he mentioned had an expense ratio of .93, I believe. Not at all sure that he would be recommending a Vanguard index fund at .19!) So, anyway, it sounds like it would cost me the same as going directly with 403bASP, as explained elsewhere in this thread.


    I am still investigating whether 403bASP itself is actually on the approved list, or if it just his connection. I am not sure if he is offering the full package of 20000+ funds that I got from 403bASP's Rick Moser, who was very, very helpful after I contacted info@403bASP.com with some specific questions about fees and funds availability. I got that address from their website https://www.403bplan.info/ It is a good place to get the big picture.



    Your ed jones rep is not going to get you any vanguard(no compensation) that you are looking for. They will mostly be American Funds r-3 shares and franklin templeton shares of expense ratios between 70-90 bps. If ASP is already a vendor in the district I would push for them to open up all funds so you can have all no-load choices you can imagine.

  15. Bigred,

    Correct me if I am wrong, were dividends, which averaged a staggering 5-6% per year, not included in these data?




    Steve, No they were not included, so that creates an illusion of equities not performing as well as reinvested dividends would have. An email from the author below.





    Thanks for your comments. It does not include dividends. Finding data going back that far is quite a challenge, and the bits of data I found to build the chart didn't come with accompanying dividends.



    Thanks again,



    Morgan "


  16. I am a teacher with a 403 b account and was wondering if I could rollover my 403b account or a portion of it from my present vendor to a IRA at let's say a bank?



    You would not be able to put it into an IRA but if the bank or investment wing of the bank could be an "approved vendor" of the plan you would be able to exchange your old 403b for a new 403b. The key is finding a vendor who can provide what you want.

  17. This chart comes from an article written on Berkshire Hathaway.


    There is precedent for the poor 10 year periods. I won't try to talk you into staying because it just means that my returns will be rip-roaring better without competing to buy the stocks against you.



    10-Year Period

    Dow Jones Industrial Average Return


    1998-2008 (9%)

    1988-1998 331%

    1978-1988 165%

    1968-1978 (19%)

    1958-1968 77%

    1948-1958 226%

    1938-1948 14%

    1928-1938 (49%)

    1918-1928 254%

    1908-1918 60%



  18. Hi,


    403B at Vanguard since the 90's. No one on list for 2009 that is low cost. Tried Lincoln as the $40 sounded ok. As we were filling out the paperwork, rep said that in order to establish account there, she would have to transfer in kind her existing Vanguard account. Pretty suprising but I didn't think the $40 was all there could be so we left. Now looking for other options. Has anyone gone down the road with 403B asp? Pros and cons?






    Nothing is perfect in this realm right now but they have the ability to get you into anything low cost that you might find. I think they have a good solution.

  19. Thanks guys! Great responses and I will ponder them all. I just know somebody who has spent some time educating me on this already as he is a % based planner and is a friend.


    I checked out fundadvice. Good site, they could make their ports a little more informative and save me some time by posting other figures with them. Anyway thanks all.

  20. Intruder, Dan, AP, bigred,

    I agree with Intruder with the IRA has implications for a higher benefit from the pay as you go SS and with bigred about have a fixed account to help. I would add that the IRA be invested in a diversified group of index funds or as bigred suggested some sort of fixed account. I would argue for the TIAA CREF traditional annuity for this purpose.



    I would not be against TIAA CREF for that portion of it either. They have had that product around forever. I am just a PIMCO fan(I own no PIMCO) because they really seem to have the best handle on the bond market a year before anyone else does.

  21. I was wondering what view the board took on paying someone for help helping in crafting a custom allocation with Vanguard. It is with an RIA and would broadly diversify across domestic, international, bond and real estate. Is .25% or .50% too much to be paying for something like this?

  22. I ditto AP comments.

    It is sooooo predictable that CLJ17 with disagree with just about anything connected to the Roth and especially those horrible index funds.





    This is a link from Motley Fool. http://www.fool.com/investing/small-cap/20...the-market.aspx


    I'm not sure just how credible it is but I can't find the article from two months ago stating that about 67% of funds managers did not beat their respective index. This article said 75%. I will fully acknowledge that there are some with the "gift", namely Buffett. But I can't own all Berkshire so I'd rather know I'm in the top 1/3 for returns vs being in the bottom every year.

  • Create New...