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janeffery

Is A Bad 457 Worth It? Lausd

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I am a teacher in the LAUSD. My husband and I are already max'ing out my 403b and his 401k. We have extra money to invest/save and are in a high tax bracket.

 

The only 457b LAUSD offers is with AIG VALIC, which I have read is horrible with hidden fees.

 

Is a bad 457b like AIG VALIC worth investing in for the tax break, or should we invest in a taxable account?

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Hi janeffery,

You are right to be extremely caustious when dealing with an insurance company, such as AIG VALIC.

 

I am a member of the LAUSD 457 oversight committee as a teacher representative. We made sure that all fees were transparent. The two funds (out of the 18 available) which charge the lowest fees are Vanguard Extended Market Index (.40% fee) a domestic equity fund and an International/Global Asset Class, Vanguard Developed Markets (.44% fee). Take a look at all of the funds available on the LAUSD website under benefits administration.

 

You are welcome to come to any meeting to find out yourself how the LAUSD 457 plan works. We meet about four times a year. The next one is in January at the Beaudry building.

 

Best wishes,

Steve

 

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Steve,

 

I was interested in finding the real cost of having a 457 with LAUSD? Say I go with the Vanguard Funds having the lowest expense ratios, how much more I have to pay for the AIG Valic services?

 

Any input would be appreciated...

 

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The two funds (out of the 18 available) which charge the lowest fees are Vanguard Extended Market Index (.40% fee) a domestic equity fund and an International/Global Asset Class, Vanguard Developed Markets (.44% fee). Take a look at all of the funds available on the LAUSD website under benefits administration.

 

 

I looked on the LAUSD Benefits Administration website and I could only find info a link to www.vrsco.com which is AIG run.

 

I saw your post to LAUSDfred on June 6, 2007 about a mailing with all the links. I must have missed it.

 

Do you have any links to the Vanguard 457?

 

Could I look on Vanguard's website to get it set up?

 

Much thanks in advance...

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RKC,

Formating is a mess on this message board. Anyway, the first column is the name of the fund, the 2nd is the fund expense ration, the third is the revenue sharing, the fourth is Valic's fee and the fifth is the total cost to you the participant. All of these costs are to be presented at any presentation.

 

In our last two meetings, we have proposed dropping and replacing Dreyfus S&P 500 and Turner Mid Cap to lower cost funds.

Hope this helps,

Steve

 

 

 

Fund Name Fund Expense Revenue Sharing TPA Expense Total Cost

 

Dreyfus S & P 500 Index 0.50% 0.40% 0.15% 0.65%

 

American Growth Fund R4 0.68% 0.35% 0.15% 0.83%

 

Vanguard Growth & Income 0.40% 0.00% 0.15% 0.55%

 

Vanguard Extended Market 0.25% 0% 0.15% 0.40%

 

Vanguard Dev Market Index 0.29% 0% 0.15% 0.44%

 

American Europacific R4 0.83% 0.35% 0.15% 0.98%

 

PIMCO Total Return Admin 0.68% 0.25% 0.15% 0.83%

 

Dreyfus Bond Market Index Inv 0.40% 0.35% 0.15% 0.65%?

 

Dreyfus Cash Management 0.30% 0.10% 0.15% 0.40%

 

VALIC - Fixed Interest 0.15% ?

 

TRP Income (ADV) 0.89% 0.15% 1.04%

 

TRP 2010 (ADV) 0.93% 0.15% 1.08%

 

TRP 2020 (ADV) 1.01% 0.15% 1.16%

 

TRP 2030 (ADV) 1.05% 0.15% 1.20%

 

TRP 2040 (ADV) 1.05% 0.15% 1.20%

 

Davis NY Venture A 0.89% 0.25% 0.15% 1.04%

 

Turner Mid Cap Growth 1.20% 0.40% 0.15% 1.35%

 

Janus Mid Cap Value (inv) 0.92% 0.25% 0.15% 1.07%

 

 

 

 

 

 

 

 

 

 

 

 

 

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Hi janeeffery,

 

No, you cannot set it up through Vanguard. Setting up the 457b is done on the VALIC website that you found. After signing on, choose the Vanguard funds that you want to invest.

 

In my previous post, the fees of all of the funds are listed. To no surprise around here, the Vanguard funds have the most money so far as reported to the commitee by the VALIC reps.

 

Hope this helps,

Steve

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Thanks Steve,

 

The information you posted is really helpful. The Vanguard funds in it are really not expensive even after taking into account Valic's cost. It could be another way to invest in Vanguard's funds. Plus 457 b gives you another opportunity to save $15,500 annually in addition to 403 b. That is not bad.

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Hi RKC,

You been posting here for awhile and its nice to see some fellow LAUSD colleagues coming here. I am going to ask you as I have ask dozens of people here and fellow colleagues to become a member of our 457 committee. We need teacher reps. Its a committment and its not always enjoyable because you are working with LAUSD and VALIC. But somebody has to keep an eye out for the employees' interests.

We have a terrific consultant that pretty much will stand with us. We meet about 4 times a year, go over reports about how the 457 plan is doing and how much are in each fund and do we need to make adjustments.

I will guarentee one thing; you will learn a lot. The finacial consultant, hired by LAUSD to consult the committee, will be offering an all day 457 fiducary academy and I would urge you to come aboard and learn.

Have a great weekend,

Steve

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Ok Steve,

 

I will try to join you at Beaudry in January. If you have a flier of information, let me know. It will be good to see other fellow LAUSD members.

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