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VAteacher

457(b) Providers- Which One To Pick

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Hello,

 

I want to start a 457(b) plan in addition to a 403(b). I am trying to find a provider through which I can invest in no-load mutual funds. The providers for 457's in my school district are:

1. AIG Valic

2. ING

3. Metlife

4. Lincoln Financial

 

Given those choices, does anyone have any experience using any of them as a 457(b) provider? So far, I have not been able to find low cost, no load mutual funds with any of them. But perhaps I am overlooking something. Any tips would be great!

Thanks,

David

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Hello,

 

I want to start a 457(b) plan in addition to a 403(b). I am trying to find a provider through which I can invest in no-load mutual funds. The providers for 457's in my school district are:

1. AIG Valic

2. ING

3. Metlife

4. Lincoln Financial

 

Given those choices, does anyone have any experience using any of them as a 457(b) provider? So far, I have not been able to find low cost, no load mutual funds with any of them. But perhaps I am overlooking something. Any tips would be great!

Thanks,

David

 

 

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Hi,

 

I would not put a any funds into the list of vendors you have listed. They are all high cost products.

 

Do you live in the State of California? If so, you could add the CalPERS 457 plan. The 457 plan fees are under one 1%. If you do not live in the California, check to see if the State you live in offers a State run 457 plan. I would hope that plan would have fees lower than the ones you have listed in your post. You could open a Roth at a low cost mutal fund company, if your income is low enough.

 

 

Good luck,

 

jyork

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Hi,

Read your post on VG Diehards. I have experience with VALIC as a Third Party Administrator with our new 457b plan at Los Angeles Unified School District. If you want to know the process and story of this plan read other posts on the 403b forum. Just search for my name sschullo.

I would stay away from all those vendors. Even though in our plan, we have all no load funds including 3 great funds from Vanguard, there are other fees. Watch for "revenue sharing" costs. These costs put about half of the 15 funds in our plan over 1% and 4-5 between .8 and 1.0%. VALIC said from the start that they could do this for .15%. Later, we were told by the financial consultant hired by the district Mercer Consultants that the additional funding was need to fund the educational plan, bonuses for reps and to jump start a plan with no assets. When we asked for justification for this additional cost, in other words, budget for the educational plan, etc, we were ignored.

jyork made a great recommendation. Check out CalSTRS, our state teachers pension plan, new 457 plan. If you don't live in Calif. check out your state pension system.

Good luck,

Steve

 

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