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United Teachers Los Angeles Official Letter

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And that brings to light a big question, would we rather have more people signed up for a group of products that might not be low cost or less people signed up for a low cost?

 

I'm wondering if you are trying to make the case for salesmen. This is an old song: without salesmen, teacher would not receive financial education, and they would not be contributing at all to 403b plans. Better that they contribute something, even if it is to a high cost alternative.

 

Response:

 

1) Salesmen look out for their own interests. Their job is to sell. Period. Refer to the previous thread from a former insurance company salesman.

2) The financial education, if any, that salesmen provide is tainted. See #1 above.

3) If lack of information on the part of employees and adequate retirement income are truly your concerns, it would not take much from the payroll department of the district office to annually inform employees of the availability of 403b and 457 plans. Payroll could do this in conjunction with the local association without endorsing any particular company.

 

 

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I have tried to get TIAA CREF approved 4-5 years ago and I was accused of all kinds of crap. My alleged implications of impropriety accusations were beneath contempt—a former treasurer was convinced I was some kind of TIAA CREF paid rep that had a personal financial reason for this. The president informed a friend of mine that “Schullo is not welcome around here”. Imagine that, coming from the president talking about an obscure member with an idea to help members with their finances. The ignorance and stupidity from a large union in a modern metropolitan area was absolutely mind blowing.

 

 

 

 

 

Steve,

 

When I got Vanguard into my district, many people were questioning my intentions as well. People I actually knew would come up to my best friend in school and ask him, "Why is Bruce really doing this, what's he getting out of it?" I ended up sending an e-mail to the entire district offering a $10,000 reward to anyone who could show that I was getting any personal financial gain by getting Vanguard in as a provider, other than lower fees for my retirement portfolio. I would also include that offer in the presentations I was doing. Needless to say, no one ever claimed the $10,000, and I think most people who care, now know that I really did do it just to get my fellow teachers better choices.

 

The most amazing thing of the entire process I went through was that people will blindly trust some Joe sitting in the lunch room with their retirement savings, but when I tried to help them, I had to offer a $10,000 reward before they would trust me. That $10,000 is a heck of a lot less than they are going to lose to the high fees that many of them continue to pay. Amazing.

 

Bruce

 

 

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Hi Bruce,

Upon reflection, I feel sorry for people who cannot separate when an individual is doing something out of pure love and doing it for love and financial gain. People who cannot see that you and I are doing this out of concern for their welfare, IMHO is the result of living in a free society and that we are emmersed in capitalistic values. Nothing wrong with that, its just an observation in people's thinking that I have learned. I have a couple of degrees in psychology.

 

I did not nor would I "explain" myself. I did not take any of the abuse personnally. I thought it was hilarious and I was happy that this happened because it did brought some attention to the 403b issue. My fellow union members knew that I was not in it for any financial gain.

 

It was only the leadership that was subsequently beaten in the next election because they treated other members just as bad.

 

The new leadership understood what I was saying immediately and eventually led to the cease of supporting all 403b vendors.

 

Have a good day,

Steve

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Guest Sierra

 

 

I believe the NEA lawsuit changed everything. It was time to move on with a clean break and the new focus on education.

 

 

I wish that my local association had the same view. It STILL endorses NEA Valuebuilder and the !@#$%s who flog that sorry product. And why? Because "if something went wrong, we would have some recourse." Can you believe it? If "something went wrong?" Something DID go wrong, and that is why NEA has been hit with that lawsuit.

 

And what do I find in my recent teacher association newsletter? An ad from Security Benefit:

 

"Valuable Advice from a Trustworthy Counselor."

 

No, I'm not kidding. That's really what it says.

 

"You want straightforward answers to your retirement planning questions from someone you can trust."

 

Honest, I'm not making this stuff up.

 

So here is how it works: the association endorses Valuebuilder, and Security Benefit sees its way to steer a few things (like newsletter ads) to the association. Nice, very nice.

 

 

 

I just want to ask a question. I honestly just want to know the thought process that went into this decision. I am interested to see how you came to the decision to make the 457 the primary investment and not the 403b. So, please don't attack me for asking a question.

 

You say you don't want any 403(b) vendors on campus. Are you also keeping 457 vendor off campus? How many 403b and 457 vendors are you allowing?

 

If you ARE allowing the 457 vendor on campus, isn't that just a way of trying to tell people they should have their money in a 457 as opposed to a 403b? Why do they have to wait for their 457 to be maxed out before opening a 403b?

 

If you AREN'T allowing anyone on campus, have you considered the fact that you will probably have decreased participation? I mean, this is the truth: Many people who work in the school district are unaware that these plans are available to them or how they work. So, I think if you are limiting it to one vendor or you are not allowing anyone on campus, you will see much lower participation over the next few years. And that brings to light a big question, would we rather have more people signed up for a group of products that might not be low cost or less people signed up for a low cost? It is just something to consider with social security in jeopardy in this country. I mean we all know that state pensions won't do the job for retirement. That is why 403b and 457 ARE so important for everyone working in the schools.

 

That is all. I just wanted to bring to light some of the things I was seeing and to see if you had thought of that and what your thoughts were.

 

Thanks !!

 

 

Guru: Spoken like a true sales shark!

 

The City School District of New York, the largest school district in the nation (1100 buildings) answered your concerns 40 years ago when it did its due dilligence and decided that to have maximum employee participation the decision must be: WE WILL ONLY ALLOW OUR EMPLOYEES TO INVEST IN NO-LOAD FUNDS(inference: loaded funds are inferior because of their higher operational costs). Result: NYC has, by far, the highest participation rate of any k-12 school district employer in the nation. Guru, I'll leave it to your common sense to tell us all how could this possibly be the result in a school district that has never allowed the 403b shark to give away "free" bagels and coffee in the cafeteria.

 

Guru: Are you telling us that the Federal Thrift Savings Plan, in order to increase participation rates, should use a commissioned sales force to distribute its investment product line-up? The TRS of West Va. adopted that stupidity for its mandatory Defined Contribution Plan---result: the employees were sold a high priced variable annuity which is now the subject of a class action suit alleging fraud.

 

So your position that only with a commission sales force selling higher priced products will you maximize participation rates is a damnable lie, that you specifically know to be a lie, and any plan sponsor that relies on such "advice" is a fool and in breach of its fiduciary responsibilities to its employees.

 

Again, the employer should utilize fiduciary standards when implementing a retirement savings plan. Just a tertiary review of the definition of loaded Vs no-load funds tells the plan sponsor that to offer both types of funds is giving a decided advantage to the loads because they employ sales sharks to distribute the product. Our friend Bruce will attest to this based on figures from his own school district---this breach of fiduciary duty on the part of the nation's employers is a national scandal and is definitely not limited to the nation's school districts or to public employment.

 

"The truth is like a bell ringing in the night." Ethics is "knowing the difference between what you have the right to do, and what is the right thing to do." "Glinda, the good witch said to the wicked witch: "Be gone, you have no power here".

 

Peace and hope,

Joel L. Frank

Pension Columnist

The Chief-Civil Service Leader

277 Broadway

New York, NY 1007

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Guru: Are you telling us that the Federal Thrift Savings Plan, in order to increase participation rates, should use a commissioned sales force to distribute its investment product line-up? The TRS of West Va. adopted that stupidity for its mandatory Defined Contribution Plan---result: the employees were sold a high priced variable annuity which is now the subject of a class action suit alleging fraud.

 

The Federal TSP has a match of up to 5% of contributions which probably accounts for "some" of the participation. Without the match participation might be a little less.

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Guest Sierra

Guru: Are you telling us that the Federal Thrift Savings Plan, in order to increase participation rates, should use a commissioned sales force to distribute its investment product line-up? The TRS of West Va. adopted that stupidity for its mandatory Defined Contribution Plan---result: the employees were sold a high priced variable annuity which is now the subject of a class action suit alleging fraud.

 

The Federal TSP has a match of up to 5% of contributions which probably accounts for "some" of the participation. Without the match participation might be a little less.

 

 

Rick: Sure the match improves participation rates. In NYC there is no match and they have the highest participation rate in the nation. The point being: Do you want higher participation rates by allowing a commissioned sales force to sell high priced products or by informing the workforce about the benefits of de minimis investing with or without a match.

 

Peace and hope,

Joel L. Frank

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I believe the NEA lawsuit changed everything. It was time to move on with a clean break and the new focus on education.

 

I wish that my local association had the same view. It STILL endorses NEA Valuebuilder and the !@#$%s who flog that sorry product. And why? Because "if something went wrong, we would have some recourse." Can you believe it? If "something went wrong?" Something DID go wrong, and that is why NEA has been hit with that lawsuit.

 

And what do I find in my recent teacher association newsletter? An ad from Security Benefit:

 

"Valuable Advice from a Trustworthy Counselor."

 

No, I'm not kidding. That's really what it says.

 

"You want straightforward answers to your retirement planning questions from someone you can trust."

 

Honest, I'm not making this stuff up.

 

So here is how it works: the association endorses Valuebuilder, and Security Benefit sees its way to steer a few things (like newsletter ads) to the association. Nice, very nice.

 

 

I just want to ask a question. I honestly just want to know the thought process that went into this decision. I am interested to see how you came to the decision to make the 457 the primary investment and not the 403b. So, please don't attack me for asking a question.

 

You say you don't want any 403(b) vendors on campus. Are you also keeping 457 vendor off campus? How many 403b and 457 vendors are you allowing?

 

If you ARE allowing the 457 vendor on campus, isn't that just a way of trying to tell people they should have their money in a 457 as opposed to a 403b? Why do they have to wait for their 457 to be maxed out before opening a 403b?

 

If you AREN'T allowing anyone on campus, have you considered the fact that you will probably have decreased participation? I mean, this is the truth: Many people who work in the school district are unaware that these plans are available to them or how they work. So, I think if you are limiting it to one vendor or you are not allowing anyone on campus, you will see much lower participation over the next few years. And that brings to light a big question, would we rather have more people signed up for a group of products that might not be low cost or less people signed up for a low cost? It is just something to consider with social security in jeopardy in this country. I mean we all know that state pensions won't do the job for retirement. That is why 403b and 457 ARE so important for everyone working in the schools.

 

That is all. I just wanted to bring to light some of the things I was seeing and to see if you had thought of that and what your thoughts were.

 

Thanks !!

 

Guru: Spoken like a true sales shark!

 

The City School District of New York, the largest school district in the nation (1100 buildings) answered your concerns 40 years ago when it did its due dilligence and decided that to have maximum employee participation the decision must be: WE WILL ONLY ALLOW OUR EMPLOYEES TO INVEST IN NO-LOAD FUNDS(inference: loaded funds are inferior because of their higher operational costs). Result: NYC has, by far, the highest participation rate of any k-12 school district employer in the nation. Guru, I'll leave it to your common sense to tell us all how could this possibly be the result in a school district that has never allowed the 403b shark to give away "free" bagels and coffee in the cafeteria.

 

Guru: Are you telling us that the Federal Thrift Savings Plan, in order to increase participation rates, should use a commissioned sales force to distribute its investment product line-up? The TRS of West Va. adopted that stupidity for its mandatory Defined Contribution Plan---result: the employees were sold a high priced variable annuity which is now the subject of a class action suit alleging fraud.

 

So your position that only with a commission sales force selling higher priced products will you maximize participation rates is a damnable lie, that you specifically know to be a lie, and any plan sponsor that relies on such "advice" is a fool and in breach of its fiduciary responsibilities to its employees.

 

Again, the employer should utilize fiduciary standards when implementing a retirement savings plan. Just a tertiary review of the definition of loaded Vs no-load funds tells the plan sponsor that to offer both types of funds is giving a decided advantage to the loads because they employ sales sharks to distribute the product. Our friend Bruce will attest to this based on figures from his own school district---this breach of fiduciary duty on the part of the nation's employers is a national scandal and is definitely not limited to the nation's school districts or to public employment.

 

"The truth is like a bell ringing in the night." Ethics is "knowing the difference between what you have the right to do, and what is the right thing to do." "Glinda, the good witch said to the wicked witch: "Be gone, you have no power here".

 

Peace and hope,

Joel L. Frank

Pension Columnist

The Chief-Civil Service Leader

277 Broadway

New York, NY 1007

 

 

What is wrong with you people ... You have got to be the most bitter people on the face of the earth. I only asked for answer ... Why must you always attack. In the end ... I don't care if NY has the highest rate of participation or care what they invest in ... Maybe I was just asking a question to hear from the other side of the coin.

 

So ... LIGHTEN UP !!

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What is wrong with you people ... You have got to be the most bitter people on the face of the earth. I only asked for answer ... Why must you always attack. In the end ... I don't care if NY has the highest rate of participation or care what they invest in ... Maybe I was just asking a question to hear from the other side of the coin.

 

So ... LIGHTEN UP !!

You asked a question, and I gave an answer. I don't see any bitterness at all in my response.

 

Other side of the coin? You provided it, as have others on this forum. Not surprisingly, still others responded to your question. If you detected any bitterness, it may be because of the negative experiences that some have had in dealing with 403b salesmen. The stories abound.

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This thread started with sshullo posting the letter that the UTLA sent to all its members endorsing AIG/VALIC. You can call it whatever you want, but AIG/VALIC was the only company listed on that letter and they gave out the phone number - that's an implied endorsement.

 

I asked if AIG/VALIC could take advantage of the situation?

 

sschullo stated that AIG/VALIC "promised" not to touch the 403(b).

 

I asked if there was some supervision?

 

sschullo responded by saying something that I'm sure he heard from LAUSD and the UTLA hundreds of times when he was fighting to get rid of the sweetheart deals in his district:

 

"if you have something to report, come to the next committee meeting. Complaining about the UTLA decision is pointless. Its a done deal and its long overdue."

 

Then I mention the article on the front page of this website where AIG/VALIC is being sued by another district for steering people into their high priced products.

 

Either you think this was a great deal for LAUSD and you're proud of the letter that sschullo posted - or your just letting your buddy of the hook.

 

Good thing guru posted his question so you could attack him instead of dealing with what this thread is really about.

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Guest Sierra

I believe the NEA lawsuit changed everything. It was time to move on with a clean break and the new focus on education.

 

I wish that my local association had the same view. It STILL endorses NEA Valuebuilder and the !@#$%s who flog that sorry product. And why? Because "if something went wrong, we would have some recourse." Can you believe it? If "something went wrong?" Something DID go wrong, and that is why NEA has been hit with that lawsuit.

 

And what do I find in my recent teacher association newsletter? An ad from Security Benefit:

 

"Valuable Advice from a Trustworthy Counselor."

 

No, I'm not kidding. That's really what it says.

 

"You want straightforward answers to your retirement planning questions from someone you can trust."

 

Honest, I'm not making this stuff up.

 

So here is how it works: the association endorses Valuebuilder, and Security Benefit sees its way to steer a few things (like newsletter ads) to the association. Nice, very nice.

 

 

I just want to ask a question. I honestly just want to know the thought process that went into this decision. I am interested to see how you came to the decision to make the 457 the primary investment and not the 403b. So, please don't attack me for asking a question.

 

You say you don't want any 403(b) vendors on campus. Are you also keeping 457 vendor off campus? How many 403b and 457 vendors are you allowing?

 

If you ARE allowing the 457 vendor on campus, isn't that just a way of trying to tell people they should have their money in a 457 as opposed to a 403b? Why do they have to wait for their 457 to be maxed out before opening a 403b?

 

If you AREN'T allowing anyone on campus, have you considered the fact that you will probably have decreased participation? I mean, this is the truth: Many people who work in the school district are unaware that these plans are available to them or how they work. So, I think if you are limiting it to one vendor or you are not allowing anyone on campus, you will see much lower participation over the next few years. And that brings to light a big question, would we rather have more people signed up for a group of products that might not be low cost or less people signed up for a low cost? It is just something to consider with social security in jeopardy in this country. I mean we all know that state pensions won't do the job for retirement. That is why 403b and 457 ARE so important for everyone working in the schools.

 

That is all. I just wanted to bring to light some of the things I was seeing and to see if you had thought of that and what your thoughts were.

 

Thanks !!

 

Guru: Spoken like a true sales shark!

 

The City School District of New York, the largest school district in the nation (1100 buildings) answered your concerns 40 years ago when it did its due dilligence and decided that to have maximum employee participation the decision must be: WE WILL ONLY ALLOW OUR EMPLOYEES TO INVEST IN NO-LOAD FUNDS(inference: loaded funds are inferior because of their higher operational costs). Result: NYC has, by far, the highest participation rate of any k-12 school district employer in the nation. Guru, I'll leave it to your common sense to tell us all how could this possibly be the result in a school district that has never allowed the 403b shark to give away "free" bagels and coffee in the cafeteria.

 

Guru: Are you telling us that the Federal Thrift Savings Plan, in order to increase participation rates, should use a commissioned sales force to distribute its investment product line-up? The TRS of West Va. adopted that stupidity for its mandatory Defined Contribution Plan---result: the employees were sold a high priced variable annuity which is now the subject of a class action suit alleging fraud.

 

So your position that only with a commission sales force selling higher priced products will you maximize participation rates is a damnable lie, that you specifically know to be a lie, and any plan sponsor that relies on such "advice" is a fool and in breach of its fiduciary responsibilities to its employees.

 

Again, the employer should utilize fiduciary standards when implementing a retirement savings plan. Just a tertiary review of the definition of loaded Vs no-load funds tells the plan sponsor that to offer both types of funds is giving a decided advantage to the loads because they employ sales sharks to distribute the product. Our friend Bruce will attest to this based on figures from his own school district---this breach of fiduciary duty on the part of the nation's employers is a national scandal and is definitely not limited to the nation's school districts or to public employment.

 

"The truth is like a bell ringing in the night." Ethics is "knowing the difference between what you have the right to do, and what is the right thing to do." "Glinda, the good witch said to the wicked witch: "Be gone, you have no power here".

 

Peace and hope,

Joel L. Frank

Pension Columnist

The Chief-Civil Service Leader

277 Broadway

New York, NY 1007

 

 

What is wrong with you people ... You have got to be the most bitter people on the face of the earth. I only asked for answer ... Why must you always attack. In the end ... I don't care if NY has the highest rate of participation or care what they invest in ... Maybe I was just asking a question to hear from the other side of the coin.

 

So ... LIGHTEN UP !!

 

When it comes to one's hard earned money I believe in a pre-emptive STRIKE---with the use of the Powell Doctrine!!

 

Best regards from the thousands of participants in DC plans nationwide that enjoy the fruits of de minimis investing. Wish you were here!!

 

Joel

 

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