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apteacher

The New Irs Reg's: Cui Bono?

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Intruder,

 

Your points are well taken. It's pretty difficult to argue that school districts should not comply with the law. I'm just disappointed that in complying with the law, folks may lose some good choices in their 403b plans. When these regulations were first proposed, there seemed to be optimism that school districts would really get it together, use the RFP process to drive a good bargain, and end up with better plans than they had. I wonder whether that is really what is happening now.

 

In addition, it still seems to me that the middle man is the main beneficiary of these regulations. I don't see anything conspiratorial about that, but it does seem that they are the beneficiaries, and not the public sector employees.

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Guest Sierra

Intruder,

 

Your points are well taken. It's pretty difficult to argue that school districts should not comply with the law. I'm just disappointed that in complying with the law, folks may lose some good choices in their 403b plans. When these regulations were first proposed, there seemed to be optimism that school districts would really get it together, use the RFP process to drive a good bargain, and end up with better plans than they had. I wonder whether that is really what is happening now.

 

In addition, it still seems to me that the middle man is the main beneficiary of these regulations. I don't see anything conspiratorial about that, but it does seem that they are the beneficiaries, and not the public sector employees.

 

 

apteacher---The regs is the participant's best friend. The sole solution is for local school districts to consolidate--- like they do when they buy chalk!! C'mon this is doable!

 

Peace and Hope,

Joel

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apteacher---The regs is the participant's best friend. The sole solution is for local school districts to consolidate--- like they do when they buy chalk!! C'mon this is doable!

 

Peace and Hope,

Joel

 

Joel,

 

Yes, if school districts consolidated on this, they could drive a pretty good bargain. However, I just don't see any great interest driving them to do that.

 

In my area, we have four elementary districts and one high school district. Yes, it would make all kinds of sense for them to get together on this ... I would love to see that. However, most teachers don't even know what a 403b is! I'm not sure that most district office personnel do, either.

 

So yes, it is eminently doable. But the decentralized nature of education (at least in my state) makes that unlikely.

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Guest Sierra

 

apteacher---The regs is the participant's best friend. The sole solution is for local school districts to consolidate--- like they do when they buy chalk!! C'mon this is doable!

 

Peace and Hope,

Joel

 

Joel,

 

Yes, if school districts consolidated on this, they could drive a pretty good bargain. However, I just don't see any great interest driving them to do that.

 

In my area, we have four elementary districts and one high school district. Yes, it would make all kinds of sense for them to get together on this ... I would love to see that. However, most teachers don't even know what a 403b is! I'm not sure that most district office personnel do, either.

 

So yes, it is eminently doable. But the decentralized nature of education (at least in my state) makes that unlikely.

 

 

decentralized?---I don't think so---Don't you have statewide standardized testing for students? The same logic applies to retirement planning---for the staff!

S T A T E W I D E---S T A T E W I D E---S T A T E W I D E!!

 

Best regards,

Joel

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You're preaching to the choir, Joel! I'm with you! I just don't know how this can be done. There is all kinds of demand for state testing, believe me. But demand for a uniform 403b plan? I wish!

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The CalSTRS 403(b) - Pension 2, could someday serve as a state-wide plan. It is the only plan in California operated on a not-for-profit basis and where more assets lead to lower fees. It is CalSTRS plan to make it available in every district in California and to provide education on it. It's not the only choice, but it is the only consistent choice.

 

ScottyD

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OCTFCU does have a for-profit entity that sells financial products.

 

I am suggesting that exactly what I stated.

 

ScottyD

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OCTFCU does have a for-profit entity that sells financial products.

 

I am suggesting that exactly what I stated.

 

ScottyD

 

Ok, so let me get this straight. TIAA-CREF's 403b plan outside of Pension2 is run for-profit? And you are sure that OCTFCU's plans are held within their "for-profit" arm?

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TIAA-CREF is non-profit, however, if you've been following their funds over the past several years, they've been raising, not lowering expenses.

 

The Goal with Pension2 is to get larger and larger and lower expenses.

 

I don't know which part of OCTFCU is run on a for-profit basis and which is non-profit, you can give them a call to find that out.

 

What I do know is that OCTFCU owns a portion of NBS, the TPA that is for-profit and that there Retirement Builder product subsidizes compliance costs. Pension2 does not subsidize any compliance costs for 403bcomply.

 

ScottyD

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My question about the effects of the new regulations is:

 

Who benefits?

 

- I don't see how employees benefit if their choices are worse. Judging from posts to this forum, a number of people are concerned about losing low cost firms.

- Districts seem to be confused and burdened.

 

So, exactly who is benefiting here? My guess is the middleman. Companies like Tax Deferred Services will benefit from being the intermediary between the districts/employees and investment firms.

 

The 403b plan was to help public sector employees, but the new IRS regulations seem to hurt them.

 

 

 

You want to know who benefits from the new regs ?? IRS ... They want control and they want to make sure they get every penny of tax defferred money going into these accounts !! They did not write the regs for anyone posting on this website. If your district does what it should ... it will benefit everyone later. Districts will begin to bid out these services ... You will see lower fees in your "full service" vendors like AXA, MET, VALIC, etc ... You will see them not only using the big names, but you will see a mix like this: 1 "full service" where an advisor will be available / 1 "middle of the road" provider where you might see the advisor once a year at your benefits fair or something of the sorts / 1 "low cost" provider where you have a VG or fidelity or the likes and you don't have an advisor you have a 800 number !! SO, what will happen is the district will be able to make everyone happy !! B/C believe it or not ... everyone wants something different !!

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Guest Sierra

 

My question about the effects of the new regulations is:

 

Who benefits?

 

- I don't see how employees benefit if their choices are worse. Judging from posts to this forum, a number of people are concerned about losing low cost firms.

- Districts seem to be confused and burdened.

 

So, exactly who is benefiting here? My guess is the middleman. Companies like Tax Deferred Services will benefit from being the intermediary between the districts/employees and investment firms.

 

The 403b plan was to help public sector employees, but the new IRS regulations seem to hurt them.

 

 

 

You want to know who benefits from the new regs ?? IRS ... They want control and they want to make sure they get every penny of tax defferred money going into these accounts !! They did not write the regs for anyone posting on this website. If your district does what it should ... it will benefit everyone later. Districts will begin to bid out these services ... You will see lower fees in your "full service" vendors like AXA, MET, VALIC, etc ... You will see them not only using the big names, but you will see a mix like this: 1 "full service" where an advisor will be available / 1 "middle of the road" provider where you might see the advisor once a year at your benefits fair or something of the sorts / 1 "low cost" provider where you have a VG or fidelity or the likes and you don't have an advisor you have a 800 number !! SO, what will happen is the district will be able to make everyone happy !! B/C believe it or not ... everyone wants something different !!

 

 

Guru:

 

Are you saying that the hundreds if not thousands of Defined Contribution plans (private and public sectors) that offer only a low cost (de minimis) option do not have the interests of their employees at heart? Should these participants sue to get "full service/middle of the road service providers".

 

Joel

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Guest Sierra

 

 

My question about the effects of the new regulations is:

 

Who benefits?

 

- I don't see how employees benefit if their choices are worse. Judging from posts to this forum, a number of people are concerned about losing low cost firms.

- Districts seem to be confused and burdened.

 

So, exactly who is benefiting here? My guess is the middleman. Companies like Tax Deferred Services will benefit from being the intermediary between the districts/employees and investment firms.

 

The 403b plan was to help public sector employees, but the new IRS regulations seem to hurt them.

 

 

 

You want to know who benefits from the new regs ?? IRS ... They want control and they want to make sure they get every penny of tax defferred money going into these accounts !! They did not write the regs for anyone posting on this website. If your district does what it should ... it will benefit everyone later. Districts will begin to bid out these services ... You will see lower fees in your "full service" vendors like AXA, MET, VALIC, etc ... You will see them not only using the big names, but you will see a mix like this: 1 "full service" where an advisor will be available / 1 "middle of the road" provider where you might see the advisor once a year at your benefits fair or something of the sorts / 1 "low cost" provider where you have a VG or fidelity or the likes and you don't have an advisor you have a 800 number !! SO, what will happen is the district will be able to make everyone happy !! B/C believe it or not ... everyone wants something different !!

 

 

Guru:

 

Are you saying that the hundreds if not thousands of Defined Contribution plans (private and public sectors) that offer only a low cost (de minimis) option do not have the interests of their employees at heart? Should these participants sue to get "full service/middle of the road service providers"?.

 

Joel

 

 

Guru: C'mon, you can do better than just ignore me, or can you?

 

Joel

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