Jump to content
Sign in to follow this  
sschullo

Lausd's New Volunteer Benefit Plan

Recommended Posts

Hi,

This one is for the record books, folks. In today’s mail, I along with 60,000+ employees of the Los Angeles Unified School District received a cover letter from Business Services Division "Benefits Administration" with a glossy brochure announcing a new opportunity to participate a Voluntary Benefits Program. This plan is offered by Liberty Mutual, includes house, car, umbrella insurance, and legal and financial planning (ARAG Group). It has beautiful color pictures that include my favorite…a picture of a Collie carrying a newspaper to promote the Pet Insurance. I KID YOU NOT!!!!!!!!!

What am I missing here? I love pets and had a dog myself, but this is either hilarious or cruel to promote this as part of a new “opportunity” while telling us with a straight face that we are "valued employees."

By comparison, there is no mention of the valuable 403b benefit plan. LAUSD has with no less than six low fee companies including one of the best, the non-profit pension institution--TIAA CREF. In three years that TC has been available, there has been no effort to let employees know and yet, LAUSD gave or sold the names and addresses of the employees to this company. What a farse and a joke about LAUSD continued mantra on the other side of their lying month that "we cannot publicise 403b companies because" blah, blah and more blah.

You bet I am writing a letter about this barbarous hypocrisy.

Steve

PS employees have until August 22, 2003 to enroll in the pet insurance program, so hurry.

 

Share this post


Link to post
Share on other sites

Steve,

 

You could try contacting Ellen Schultz of the Wall Street Journal. She loves the things employers try to get away with. My company also tried to offer the same types of things - "free advice" about life insurance, etc. And it was also called a "Voluntary Benefits Program". Coincidence? I met with the rep and asked a couple of questions. It was pretty funny to see her squirm:

 

Q: Do you have a degree in business or finance?

A: No.

Q: Are you a Certified Financial Planner?

A: No.

Q: Do you have a CLU certification?

A: Umm.. No (I don't think she even knew that this was)

Q: Do you get compensated if I buy products through your company?

A: Yes.

Q: Do you get compensated if I buy products through another company?

A: No.

Q: Can I have 5 other quotes on insurance rates for these types of products from other companies? (I got this one from a Geico commercial)

A(rep): Can I get back to you on that?

A(me): No. Bye.

 

Alec

Share this post


Link to post
Share on other sites

Q: Do you have a degree in business or finance?

A: No.

Q: Are you a Certified Financial Planner?

A: No.

Q: Do you have a CLU certification?

A: Umm.. No (I don't think she even knew that this was)

--------------------------------------------------------------------------------

Alec,

 

In my view the simple possession of these degrees and professional designations has nothing to do with assuring that the client's interests come first!

---------------------------------------------------------------------------------

Steve,

 

You may want to include in your letter a request to join the Califorinia Statewide 457(b) Plan which is made available to California school districts.

----------------------------------------------------------------------------

 

Peace,

Joel L. Frank

Share this post


Link to post
Share on other sites

Hi Alec,

Thanks, I will contact Ellen as well as the LA Times and Daily News here in LA. This is too good to be true.

You questions regarding financial education of the person selling these and other 403b products are irrelevant to 403b. The trick for financial advisers is gaining the trust of educators, that’s why many are former teachers. One of the lobbyists that testified against our 403b reform bill AB2506 in Sacramento was a former HS English teacher, very classy and well-heeled. The head of one of UTLA's (teachers union) 403b union approved companies is also a former teacher.

I would ask if they are former teachers, which would be another great reason to avoid them. Those folks with advanced financial degrees know damn well that index investing with Vanguard and TIAA CREF does not pay commissions. They learn to play the Wall Street "beating the indexes" game, which is a winning game for the adviser and a losers game for the investor.

Steve

 

Share this post


Link to post
Share on other sites

Hi Steve:

 

In my view there is no better way to clean up the 403b abuse in your state than having every school district in the state offer the California 457 Plan.

 

All the districts belong to the State TRS so it is more than logical that all the districts permit their personnel to contribute to the State's 457 Plan. The law is on the books! The school districts just have to ask for it. Why don't participant activists like you clean up the 403b abuse by making sure all districts adopt the State's 457 Plan? As you know the San Diego School District has done just that. Have you contacted them, as you said you would, to see the steps they used in making the Statewide 457 Plan a reality for their personnel?

 

Peace and hope,

Joel

Share this post


Link to post
Share on other sites
Guest Guest_LBJackson

Joel, you are RIGHT ON with the advocacy of the 457. I think the 403(b) question will not be resolved until the entire system gets reformed from the top. The 457 is the best "alternative" until then.

 

On the subject of Voluntary Employee Benefits. This is not a marketing term, i.e. made up to promote insurance products. This is a term used to identify available products not provided by ones employer but authorized to be purchased via payroll deduction. It is nothing more than alternative to the market at large. If the employer does their job, these products SHOULD BE packaged tooffer a distinct advantage over what is avaialble in the "street" variety of similar products. For example, they might be guaranteed to issue or offer at reduced group rates.

 

As more and more employers are passing the costs of benefits onto their employees, more and more employers are providing "Voluntary Employeee Benefits" as an alternative. Unfortunately, as Steve points out, Vet Insurance is hardly a sought after alternative to curbing rising premiums.

 

 

Alec's series of questions to the representative of a single company and their products is relatively of no use since the agent need only be required to be licensed to sell said representative products, in this case Liberty Mutual's. Now, if this were a broker-dealer with an array of choices, any respectible consumer would have to ask these questions of the representatives providing services and products. But, Alas, this is unfortunately not the case...again.

 

Steve, several months ago I had the same incredulous response to this pet insurance as you. However, we are under-estimating the American pet lover, or so it seems. According to an article a few months ago in Newsweek, this is the mover in the field of insurance. Apparently veterinary medicine is promoting pet health issues as one would promote health issues to the children of parents. The results are expensive treatments on dogs and cats once "overlooked" by owners. Plus they promote bringing your pet in for a "check up" much like you would rotate tires and change oil in your car at least twice a year. This is not BIG business, but it is impressive. the lead company in this arena, Veterinary Pet Insurance, claims well over 1-million policies in force and over 80% of the market.

 

I am not advocating any of this, it is always confusing when our employers feel they are doing us a "favor" by setting us up with intrusive insurance agents. We are a stationary target with a definable demographic, i.e. when you drive by a school it is full of teachers, when you drive by a police station it is full of cops, it is a predictable and known market. When you drive by an office building, as an insurance agent you haven't the foggiest who resides in the building. If you check with your union you will most likely find that they, too, offer "MEMBER BENEFITS", i.e. Voluntary Employee Benefits" of a variety of insurances and other products, ostensibly "handpicked" by discerning union officials for the benefit of its members. Alec, you should ask those questions again of the union people who select and allow we employees of school districts to be marketing targets for every insurance operation with a smile and a check in their hand.

 

Really, you would think that the employers would survey their employees JUST ONCE to see how they feel about how their employer is doing their job and the services offered? What's wrong with a little feedback?

 

I've been looking into some programs that offer Voluntary Employee Benefits through associations run not by unions nor employers, but by employees. The primary purpose is to offer insurance and other products at lower premiums and costs than comparably individually issued products.

 

Finally, sorry about the rant...but this forum is about 403(b) issues. Voluntary Employee Benefits has nothing to do with 403(b) EXCEPT watch out for the annuities offered by the same people trying to sell you VEBs, it is a Trojan Horse. A good Voluntary Employee Benefit program offers a variety of products that are regularly purchased by consumers but that are offered at a reduced or discounted rate and might include 1/2 off Disneyland Tickets or really reduced Las Vegas getaways, or 20% reduced premiums for the exact auto insurance and homeowners coverage I have now.

Share this post


Link to post
Share on other sites

Section 457 was added to the Code in 1978. From its beginning 457 plans could have been offered to the nation's public school personnel. They for the most part have not been because section 403(b) was made applicable to school districts in 1961. This 17 year headstart made it almost impossible for the 457 to gain respectable market share especially in light of the "offset of contribution limits" between it and the extremely entrenched "TSA".

 

All of this changed effective January 1, 2002 with the repeal of the "offset" provision. In order to contribute more than the per plan maximum both plans must be offered. A qualified 457/403(b) employer that does not offer both plans is simply negligent and should be taken to task.

 

Peace,

Joel

Share this post


Link to post
Share on other sites

And of course teachers can and should avoid all high cost plans--457/403(b)/401(l)--by going to a no-load, low fee ROTH IRA. Soon Congress will be incresing the IRA limit to $5,000. I don't know many married couples who save $833/month.

 

Ted

 

 

Share this post


Link to post
Share on other sites
Guest Guest_LBJackson

Ted, as usual, you have brought home the point. The average TSA contribution is what? Around $4,000 a year. $5,000 is in the range of that average savings and with a Roth and a no-load, low-cost fund, voila, a good retirement strategy and plan.

 

Questions?

--Will Roths be made payroll deductible as are TSA plans for the convenience of the investors?

--Will 403(b) regulations modify to come into line with other plans?

--Will school district employers embrace the changes or let the 403(b) die on the vine?

--Will the Hold Harmless chokehold on the school districts ever relax or be eliminated?

--Will the unions take any actions? And if they do, will they work for as opposed to against the true best interests of their dues-paying memberships?

 

LBJackson

Share this post


Link to post
Share on other sites

K-12 EMPLOYEES SHOULD CANCEL THEIR DUES CHECK-OFF UNTIL SUCH TIME AS THEY SEE THAT THEIR UNION IS FIGHTING FOR THEIR INTERESTS!! ---THIS INCLUDES A DEMAND THAT IF THERE IS A STATEWIDE 457/401k PLAN IT IS MADE AVAILABLE TO TEACHERS.

 

California School districts must request membership in the statewide 457 and 401k Plans. A few dozen have already joined.

 

The same situation exists in the State of New York for school districts outside of New York City. k-12 employees of New York City have been invited (without any union involvement) by Mayor Mike Bloomberg to contribute to the Citywide 457 and 401k Plans. The abusive City of New York TRS 403(b) that has been abusing k-12 employees in the City of New York for 33 years is indeed "dying on the vine". K-12 employees really have something to celebrate because for 33 years there has never been, until now, any other alternative salary reduction plan.

 

 

Peace,

Joel

Share this post


Link to post
Share on other sites
Guest Guest_LBJackson

JLF - is it as easy as all that to cancel your union membership, simply not approve dues deductions with the mark of a check?

 

If enough of us did just that, it certainly wold get someones attention. Thanks for the "tip"

 

LBJackson

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

×
×
  • Create New...