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sschullo

Follow Up To Lausd's New Benefits Program

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Thanks so much Joel, Scotty, Ted and LBJackson (need to tell us your first name),

 

Obviously Joel, it will take a while to digest all of your information. I think it will take a state law to make the Savings Plus Program available to K12 educators. But then again maybe not....

I agree that we should more forward with the 457 because of the insurance industry corruption of the 403b by law and by practice.

 

Scotty and Joel, I will provide LAUSD what you told me and let them sort it out. The LAUSD benefits administrator will be hiring outside consultants to help out and will be able to make sense out of all of this information. TIAA CREF will be talking with LAUSD this week.

Some day soon we should have a face to face 403b/457 forum member meeting similar to the Vanguard Diehards forum who meet every year.

 

Thanks again guys,

Steve

 

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I agree that we should more forward with the 457 because of the insurance industry corruption of the 403b by law and by practice.

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Steve,

 

You are right on point. It is my view that section 403(b)1 is bad law. In 1958 it was written for insurance companies by insurance companies. It definitely was not written with the employee/consumer in mind. IT WAS A DIFFERENT ERA. It simply moved the life insurance salesperson from the teacher's home to the teachers' cafeteria where he/she could make a presentation, not to one employee but to dozens. After selling the "TSA" he/she could move on to life insurance and then some disability insurance. And then "take care" of their respective spouses and children and grandchildren, other friends and relatives, etc. Could you find a more efficient way to prospect for gold, I mean clients, over the past 44 years? THE DAY IS JUST NOT LONG ENOUGH!

 

When the mutual fund was offered under 403(b)7 only the loaded families could compete with the "TSA". Giant direct distributors/wholesalers like TIAA-CREF and Vanguard were late in entering the 403(b) market place because they had little or no experience selling retail. Section 403(b) is designed for insurance/mutual fund companies with a commission based retail sales force. IT IS AS SIMPLE AS THAT. THIS IS NOT ROCKET SCIENCE.

 

Enter sections 457/401(k) of the same Internal Revenue Code and one can plainly see how obsolete, abusive and totally unnecessary section 403(b) is. LET'S RID OURSELVES OF IT.

 

Peace,

Joel

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