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Commission Free 457(b) Providers?

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A previous post got me interested, I am an employee of a Goverment entity which provides a 457(b) plan to it's employee's. In my opinion, we have nobody within the "management" dept. that really knows what they are doing related to retirement savings plans.

 

Anyway, I am in a positon where I can make "suggestions" for changes. I am not an expert by any means, only an employee wishing to get the most bang for the buck.

 

Are there any providers a Goverment entity could contract with to provide services to it's employee's that DO NOT charge large commissions?

 

Previous post listed : USAA Investment Management Company, and

Vanguard Group

 

Currently we employees are offered products from: Kemper Group, Mass Mutual, and Nationwide, all charge a commission. I would like to advise my finance department to consider adding, or changing providers for this service.

 

-Tom

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Guest Sierra

A previous post got me interested, I am an employee of a Goverment entity which provides a 457(b) plan to it's employee's. In my opinion, we have nobody within the "management" dept. that really knows what they are doing related to retirement savings plans.

 

Anyway, I am in a positon where I can make "suggestions" for changes. I am not an expert by any means, only an employee wishing to get the most bang for the buck.

 

Are there any providers a Goverment entity could contract with to provide services to it's employee's that DO NOT charge large commissions?

 

Previous post listed : USAA Investment Management Company, and

Vanguard Group

 

Currently we employees are offered products from: Kemper Group, Mass Mutual, and Nationwide, all charge a commission. I would like to advise my finance department to consider adding, or changing providers for this service.

 

-Tom

 

 

Is your governmental entity a state, county, town, school district?

 

Joel

 

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Hi Tom;

 

The answer is Yes, but...............

 

Your employer has a plan and various contractors already.

 

The current conditions matter to non-commissioned service providers because the economics of the arrangement for them is a function of their projected costs (typically a perhead calculation) and revenues (a function of how many assets they will have under management). If their belief is that they will be faced with an on-the-ground commissioned salesforce, they are very likely to stay away.

 

To attract the best bids from no or low comissioned providers requires active involvement of a motivated employer. Without such efforts (which may include some degree of exclusivityregarding future contributions, and perhaps elimination of current contractors, and additional tactics) low to no commissioned providers will likely not be willing to provide services.

 

Names in addition to the ones you have include Fidelity, T. Rowe, TIAA-CREF, Principal, Lincoln, Prudential, Diversified Investment Advisors, and many others.

 

Cheers,

 

Danc

 

 

 

 

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Guest Sierra

Tom:

 

Many states allow their local governments, like counties, to opt into their 457 plan. Hopefully your state's plan is a no-load offering. If it is, you should contact them to see if they allow local governments to join. DO NOT ACCEPT A HIGH PRICED PLAN.

 

Case in point: The public hospitals system of the City of New York operates a high cost 403(b) plan while the City's Office of Labor Relations offers a no-load Deferred Compensation 457 and 401(k) Plan. I have advised hospital system employees to discard the high priced 403b and contribute all they can to the 457/401k plans.

 

Peace and hope,

Joel

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