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Cal State University System & Vanguard ?

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I am a CSU employee and have been looking into getting Vanguard added to the 403(b) options. So far, I've gone through two layers of HR at the Chancellor's Office, only to be told that:

 

"Vanguard wants the CSU to guarantee a certain amount of transferred funds in order for them to even consider signing an agreement with the CSU. The 403(b) plan is voluntary, and our office is prohibited from soliciting business on behalf of any TSA vendor, and we are also prohibited from providing a guarantee of the number of participants or funds to be deposited with any particular TSA vendor."

 

I checked with Vanguard, though, and they said that this was incorrect and that no guarantee was required.

 

I'm not too unhappy with the USAA Index fund that I have for my current 403(b), but I wonder why it is such a big deal to get Vanguard as a choice?

 

-John

 

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Vanguard does not provide revenue sharing to vendors. People who recommend Vanguard don't get a kickback or fee, so the sales people who get their money from other companies have consistently supported a wall that separates the company from potential customers. For one thing, Vanguard doesn't provide money for someone to fill out the form for you. If you want help you must call customer service, but you can't rely on the local 403b saleman to help, he's not getting a piece of the action.

 

I was the financial "guru/recommender" at a small non-profit recovery house. Each company I contacted set up the 403b plan quickly and with no hitches. I helped any employees interested in these companies, and of course they were because of the literature and simple application procedures provided by the companies.

 

This was after I left CUSLA, having worked their for over 25 years (Special Ed., Center for Emplyment and Training for the Disabled. CSULA had agents prowling the halls and would not hear of alternatives. The staff was unable to get off their a.... , and like so many educators, let themselves be unwitting victims lest they be too concerned with filthy lucre. Now they have lackluster annuities instead of fat travel pots.

 

Best of fortunes, Dan

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I contacted HR at the Chancellor's Office again, quoting the email from Vanguard saying that they don't require a guarantee to become a 403(b) provider. I asked if Vanguard could now be added as an option, or if they could point me to a document in which Vanguard said they needed a guarantee. I was told that a new group of 403(b) providers has just been selected for the CSU, and that a large mailout would take place to let employees know of their options. When that had happened, I could have Vanguard contact the CSU. I will give it a try and see what happens.

 

Either something has changed recently, or there has been some misinformation. How odd is it that a premier mutual fund company like Vanguard would have been excluded as an oversight?

 

-John

 

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I contacted HR at the Chancellor's Office again, quoting the email from Vanguard saying that they don't require a guarantee to become a 403(b) provider. I asked if Vanguard could now be added as an option, or if they could point me to a document in which Vanguard said they needed a guarantee. I was told that a new group of 403(b) providers has just been selected for the CSU, and that a large mailout would take place to let employees know of their options. When that had happened, I could have Vanguard contact the CSU. I will give it a try and see what happens.

 

Either something has changed recently, or there has been some misinformation. How odd is it that a premier mutual fund company like Vanguard would have been excluded as an oversight?

 

-John

 

 

I'm a public school teacher in the bay area and went through the same hoops trying to get Vanguard added to my district's approved list. In my case, the argument was that Vanguard wouldn't sign a "hold harmless" agreement. I argued extensively with the district. The district form teachers were required to fill out included a hold harmless, so for Vanguard to do one was redundant. I also gave the HR/403 person a list of other districts in Northern California that allowed Vanguard. Vanguard was never added to the list.

 

The ups###### (anyone know why the word "s h o t", as in up s h o t, would be consistently edited out like a swear word?) of this is that I did a frozen asset rollover out of an approved district 403 provider (Mass Mutual, don't ask...), into Vanguard. I got my money into Vanguard, but I can't make monthly contributions to it. It is a bit of a pain, but if you want to move a sizeable chunk of money and let it be, it is a viable option. In my case, I moved the money, then continued to contribute to a district approved company (in this case, American Century). Mass Mutual tried to tell me I couldn't do a frozen asset rollover, then tried to withhold penalty money. It wasn't until I threatened to go to the SEC that they released the money to Vanguard. Vanguard was very helpful with information on the frozen asset rollover.

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Guest Sierra

 

I contacted HR at the Chancellor's Office again, quoting the email from Vanguard saying that they don't require a guarantee to become a 403(b) provider. I asked if Vanguard could now be added as an option, or if they could point me to a document in which Vanguard said they needed a guarantee. I was told that a new group of 403(b) providers has just been selected for the CSU, and that a large mailout would take place to let employees know of their options. When that had happened, I could have Vanguard contact the CSU. I will give it a try and see what happens.

 

Either something has changed recently, or there has been some misinformation. How odd is it that a premier mutual fund company like Vanguard would have been excluded as an oversight?

 

-John

 

 

I'm a public school teacher in the bay area and went through the same hoops trying to get Vanguard added to my district's approved list. In my case, the argument was that Vanguard wouldn't sign a "hold harmless" agreement. I argued extensively with the district. The district form teachers were required to fill out included a hold harmless, so for Vanguard to do one was redundant. I also gave the HR/403 person a list of other districts in Northern California that allowed Vanguard. Vanguard was never added to the list.

 

The ups###### (anyone know why the word "s h o t", as in up s h o t, would be consistently edited out like a swear word?) of this is that I did a frozen asset rollover out of an approved district 403 provider (Mass Mutual, don't ask...), into Vanguard. I got my money into Vanguard, but I can't make monthly contributions to it. It is a bit of a pain, but if you want to move a sizeable chunk of money and let it be, it is a viable option. In my case, I moved the money, then continued to contribute to a district approved company (in this case, American Century). Mass Mutual tried to tell me I couldn't do a frozen asset rollover, then tried to withhold penalty money. It wasn't until I threatened to go to the SEC that they released the money to Vanguard. Vanguard was very helpful with information on the frozen asset rollover.

 

FYI: The California State 457 Plan allows school district employees to opt in. Check it out.

 

 

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