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Guest Joel

Hey bill,

 

I trust you and your legal/research staff are hard at work trying your best to unearth the authenticity of the "rule" you assert exists. Please don't consider this message as putting you under pressure. I want you to take as much time as you need.

 

Peace and happy researching,

Joel

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Joel,

 

Per your requested I have included the rule that you have requested below:

 

Q: 5:25 What is an employer's investment responsibility for 403(b) plan

that is not subject to ERISA?

 

If a 403(b) program is not subject to ERISA, the employer will not have any fiduciary responsibility under ERISA for the selection of insurers and investment funds. Furthermore, because a voluntary 403(b) program is not an employer-sponsered plan, it is doubtful that any state law fiduciary duty would apply.

 

Therefore, in some cases, it may be wisest for an employer to deliberately take no responsibility for examining investments offered for a voluntary 403(b) program. That is because once an employer begins to act, the law requires it to act and communicate carefully. In essence, if participants and employees are led to believe that an employer has performed some kind of investment or financial analysis, and if the analysis or comminication is not as thorough and accurate as would have been done by a recognized professional, the employer could become liable- for example, under the common law tort of negligent comminication. [American Law Institute, Restatement (Second) of Torts, ss 552].

 

Referance: 403(b) Answer book.

 

Now that I have answered your question, I have one for you. Have you even taken a moment to try out the interactive demo on the NEBSonline website? The purpose of this post was not to debate the law and what is wrong with it. We know there are problems. NEBSonline has offered a solution to the problem. All I want to know is what you think of the solution!!

 

 

 

 

 

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Guest Joel

Bill, I will respond in CAPS at the appropriate places in your message.

 

Peace,

Joel

____________________________________________________________

 

Posted on Jan 28 2004, 01:50 PM

 

Joel,

 

Per your requested I have included the rule that you have requested below:

 

Q: 5:25 What is an employer's investment responsibility for 403(b) plan

that is not subject to ERISA?

 

If a 403(b) program is not subject to ERISA, the employer will not have any fiduciary responsibility under ERISA for the selection of insurers and investment funds. Furthermore, because a voluntary 403(b) program is not an employer-sponsered plan, it is doubtful that any state law fiduciary duty would apply.

 

THIS RULE DOES NOT MEAN THAT THE EMPLOYER CANNOT LEGALLY LIMIT THE INVESTMENT FUNDS ON THE 403(b) PLATFORM AS YOU ASSERT. YOU ARE SIMPLY INTERPRETING THIS RULE TO TELL YOUR EMPLOYER CLIENTS THAT IF THEY LIMIT THE CHOICES THEY ARE OPENING THEMSELVES UP TO POSSIBLE LITIGATION. SO AS YOUR SALES PITCH EVOLVES YOU GO ON TO TELL YOUR EMPLOYER PROSPECTS THAT IT IS BEST TO OFFER THE ENTIRE UNIVERSE OF FUNDS SO THAT YOU WILL BE INSOLATED FROM LITIGATION. YOU NEED TO SEPARATE THE RULE YOU QUOTE FROM YOUR CONTORTION OF THE RULE INTO A MARKETING PLOY. YOU UNETHICALLY EXPAND/INTERPRET THE RULE TO FIT YOUR MARKETING SCHEME AND THEN LABEL THE ENTIR DIATRIBE AS THE "RULE". WHAT IS REALLY SCARY IS THAT YOU EVENTUALLY BELIEVE THAT YOUR SALESPITCH/DIATRIBE IS IN FACT THE RULE. I ASSURE YOU IT IS NOT. I KNOW THIS WILL FALL ON YOUR DEAF EARS BUT I WILL GIVE YOU THE RULE SO THAT OUR READERS WILL HAVE THE RULE AT THEIR FINGERTIPS. BILL, I ASSURE YOU THE ACTUAL RULE PUTS A DAGGER INTO YOUR BUSINESS PLAN---BUT HERE IT IS:

 

"GIVEN THE RANGE OF INVESTMENT ALTERNATIVES AVAILABLE TO TSAs ---E.G., THE CHOICE OF VARIOUS INVESTMENT FUNDS EACH OF WHICH HAS A DIVERSIFIED PORTFOLIO, MUTUAL FUNDS, T-BILLS, CERTIFICATES OF DEPOSIT, STOCKS, BONDS, MONEY MARKET FUNDS, GOVERNMENT SECURITIES, FIXED AND VARIABLE ANNUITIES---IT SEEMS THAT A TSA PLAN COULD SATISFY THE REQUIREMENTS OF PROVIDING THE EMPLOYEES WITH THE BROAD RANGE OF INVESTMENT ALTERNAIVES REQUIRED BY AN ERISA SECTION 404© PLAN". SEE: "WORKING WITH TAX-SHELTERED ANNUITIES-403(b) PLANS EXPLAINED, THIRD EDITION, STEVEN LEVENTHAL, J.D., L.L.M., TAXATION, CCH COMPENSATION AND BENEFITS PROFESSIONAL SERIES.

 

SO, BILL, EVEN THOUGH MOST 403bs ARE NOT COVERED BY ERISA MOST NON ERISA 403bs HAVE IN FACT SATISFIED THE ERISA REQUIREMENT (WITHOUT YOUR "HELP") BY SIMPLY OFFERING THE ABOVE INVESTMENT CATEGORIES EITHER ON A LOAD OR NO LOAD BASIS. YOUR COMPLETE SALESMANSHIP/SHOWMANSHIP IS MAGNIFIED A THOUSAND TIMES WHEN YOU HAVE THE CHUTZPAH TO TELL US THAT AN EMPLOYER MUST OFFER ANY AND ALL INVESTMENT OPTIONS TO ANY AND ALL EMPLOYEES IN ORDER TO SATISFY THE REQUIREMENT OF OFFERING "A BROAD RANGE OF INVESTMENT ALTERNATIVES" AND BY SO DOING IT WILL INSOLATE ITSELF FROM POSSIBLE LITIGATION. YOU ARE SOME PIECE OF WORK!!

 

I TRUST I HAVE PROVEN TO ALL,WHO HAVE NO AX TO GRIND THAT, THE RULE THAT BILL AND HIS COHORTS RELY ON IS SIMPLY NO RULE AT ALL BUT A SLICK IF NOT ILLEGAL WAY TO GAIN THE CONFIDENCE OF THE PROSPECTIVE EMPLOYER AND IT EMPLOYEES. I WOULD NOT GIVE THEM A DIME'S WORTH OF BUSINESS. BILL, YOU GUYS GOT SOME PAIR OF B---- TO EXPECT A PROSPECT TO PAY YOU $35 ONLINE FOR THE RIGHT TO VIEW YOUR INVESTMENT PLATFORM.

 

Therefore, in some cases, it may be wisest for an employer to deliberately take no responsibility for examining investments offered for a voluntary 403(b) program. That is because once an employer begins to act, the law requires it to act and communicate carefully. In essence, if participants and employees are led to believe that an employer has performed some kind of investment or financial analysis, and if the analysis or comminication is not as thorough and accurate as would have been done by a recognized professional, the employer could become liable- for example, under the common law tort of negligent comminication. [American Law Institute, Restatement (Second) of Torts, ss 552].

 

Referance: 403(b) Answer book.

 

 

Now that I have answered your question, I have one for you. Have you even taken a moment to try out the interactive demo on the NEBSonline website? The purpose of this post was not to debate the law and what is wrong with it. We know there are problems. NEBSonline has offered a solution to the problem. All I want to know is what you think of the solution!!

 

AT THIS POINT IN MY RESPONSE I THINK YOU KNOW WHAT I THINK OF YOUR 'SOLUTION'!!!!

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Interesting response Joel. It seems to me that you are more concerned about reducing options for employees then truly making it a better plan for people to take advantage of. I know that employers have the abilities to manage their own retirement benefits Joel, the problem is that they don't. In stead of wasting your time and energy in discounting possible solutions to serious problems in the industry, and possibly promoting your own motives and incentives of profit, why don't you admit to the fact that our service is credible and truly offers a PROVEN solution, not just talk.

 

As far as your opinion, it is one of many and I do concede that you are aloud to it. However, there are countless others who see a real value in what we are trying to do. Not only employers, but Union Representatives, Associations and government entities as well.

 

I have come to the conclusion that you are not interested in learning what NEBS has done to help the people in this industry, but instead are intent on trudging your shoes over anyone that dares say a word. I am sorry that you feel so disheartened about the possibilities of improvement that NEBSonline offers, the countless hundreds of people that are more informed because of what we are doing, and the true benefits that the 403(b) arrangements have.

 

It is obvious that you haven't even taken the time to look at the research capabilities of the system or how it really works. That being said, I will not take anymore of my time arguing these issues with you. It is clear that you are not willing to even leave the possibility that what I say is true. If you wish to say something in reference to the website and abilities that it offers to employees, I am willing to listen. That is what I posted this for in the first place.

 

If you are intent on trying to drag me into a personal battle of words, I won't belittle myself. As I said, you are entitled to your opinion, that doesn't mean that everyone else agrees with you.

 

It has been an interesting dialog with you Joel, but I believe that it's time to let others say what they feel (without worrying that you are going to attack them).

 

Regards,

 

Bill

 

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Guest Joel

Bill,

 

In this great land of ours we all have the right to our own opinions.

 

But I draw the line in the sand between where legal rules end and a sales proposal/personal opinion starts. To your own selfish ends you conflate the two and I find that to be reprehensible. You never quote the actual rule because you could not make a living selling 7-8 no-load funds that meets the test of providing a "broad range of investment alternatives".

 

You are using this website simply to prospect for clients. In a million years you never expected to have the actual rule stated on a website that has as its mission the protection of the assets of ordinary people. Why don't you post your "rule" on the message boards of www.benefitslink.com and see what the professionals in this industry think of your rule. And be sure to email a thank you to Dave Baker, the owner, for charging you $ZERO to use his website.

 

I challenge you to assert that you did not know the rule as quoted by me. If that is the case then you are professionally negligent. On the other hand if you know of the rule and never state it then again your are guilty of negligence. Either way---your goose is cooked as far as I am concerned. What kind of cannon of ethics do you and your cohorts subscribe to?

 

Peace and Hope,

Joel

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