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Valic's Employee's Retirement Plan

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I was looking at the old message 403bwise msg board to understand more and found this message. I Know I was going to talk to VALIC about this no-load option through their parent company, however, do VALIC employees actually get this plan and not the M&E Plan?

 

Sorry for being so persistent.

 

Thanks,

 

Tampa Gator

 

 

Author: Joel

Date: 3/10/2003 1:58 pm PDT

 

Joepa---Due to being eaten up by the posting ghost I have responded to your previous remarks as a new thread.

 

Rest assured that Valic could use its own funds with its high costs for its own employees' retirement plan-----but no one would contribute!! Saying that Valic must offer different funds is like saying that Macys cannot offer to sell its merchandise to its employees.

 

TIAA-CREF uses its own funds for its employees' 401(k) plan.

 

All Valic (the queen of the load) particpants who do not have a no-load alternative like the Vanguard should inform there employer's CEO of the fact that the Valic offers only a no-load platform to its employees. It is an outrage for ANY EMPLOYER, non-profit or for-profit to offer only a loaded platform. Such policy shows the utter contempt the employer has for its employees!

 

Peace,

Joel L. Frank

 

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I've heard that Valic's employees do not use Valic for their own retirements. I believe someone wrote that it is against the law to make employees invest their retirement accounts with their employers. However, this appears to be yet more annuity sales rep manure. TIAA-CREF employees are allowed to invest in T-C products (http://www5.tiaa-cref.org/careers/candidate/benefits_security.html#401). The same is true for Vanguard (http://www.vanguardcareers.com/benefits_compensation.shtml#thrift_plan)

 

The fact is that no financial advisor worth his salt would invest his own money in a Valic-like annuity plan. Of course Valic employees don't invest with Valic. If they do, I'd bet the house and the collective retirement savings of all of this board's readers that they get A TOTALLY DIFFERENT FEE STRUCTURE TO WORK WITH. In short, investing with Valic is detrimental to your retirement income. They are to be avoided at all cost.

 

I am still yet to see a Valic rep kiss a client before he ...

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Here is some information that may help clarify this nagging question. Because of ERISA laws that cover 401k plans, Valic is not allowed to administer it's own plan. This would create a conflict of interest between the company and its employees. It has to use an outside vendor (therefore it will have different investment options) to administer it's plan. The standard Valic VA product cannot be used. They do have a top hat plan (deferred comp plan) for it's highly compensated employees that is not covered by ERISA laws. That plan does feature the standard VA product. The 401k plan does offer several SunAmerica funds (an AIG company) as options.

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dbmdawg...

 

Do they buy the Sunamerica funds at Net Asset Value or do they pay a load?

 

Additionally, please cite the relevant section of the ERISA to support your assertion that a mutual fund group or an insurance company may not use its own investment funds for its own 401(k) Plan.

 

Peace,

Joel L. Frank

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To answer your first question, yes employees do buy SunAmerica funds at NAV in the 401(k).

 

To answer you second question. Remember that with ERISA laws, you are dealing with a typical set of government laws that are very broad and open to interpretation/rulings by a government agency- the DOL. Most of this revolves around who are fiduciaries and fiduciary liabilities with respect to Sec. 404© and and prohibited transactions in Sec. 406.

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