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Does Anyone Know A Third Party Administrator That Will Sign Vanguard&#

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My school district has hired Gatekeeper as our "hold harmless" administrator. Unfortunately I can no longer directly invest with no-load providers such as Fidelity or Vanguard. My choices are insurance companies...

I have two questions and one statement of what I think I need to do.

 

1) 403b ASP is a company that allows me to get into Vanguard and Janus funds (403b ASP has provided management services for 401k plans and now it is getting in the soon to be lucrative 403b plan management). I'm having a hard time finding info. about 403b ASP. On independent sites, I found that their fees are $40 a year plus 0.1% plus the cost of the mutual fund. I could live with that. However, I stumbled across an asset based fee of 1.78% and a consent deferred sales chared of 1% if I keep money in funds for at least 6 years. I am so nervous about hidden fees... Also, there is a 1% fee for having an advisor. Do I have to have an advisor with 403b ASP??

 

2) Gatekeeper offers 14 different vendors, predominately insurance companies or companies like 403b ASP and ING which are middlemen that seem to be getting too big a piece of my pie. Some of these vendors, such as Metropolitan Life Insurance Co, are in financial trouble. Now that my District has limited my options for investments, could my district have some fudiciary responsibility for the bad financial decisions of its vendors?

 

My plan is to make sure that I do NOT roll my current 403b monies into one of these robber-barrons. I will max my ROTH IRA and look into a 457 through my state. Our distict has a poor history of trying to manage our 403b accounts. They signed up with Horizon Benefit as a hold harmless company that also sold investment products and was found to embezzle 403b monies. Needless to say, we got our District to drop Horizon Benefit after a year and a half of meetings. I understand that the current situation is different, but I'm tempted to find my legal options...

 

 

Hi Hannibal, I'm with 403b ASP and wanted to pass along that we (403b ASP) have no hidden fees and you do NOT have to have an advisor to use our platform. If you are self directing your account we can provide access to Vanguard and Fidelity funds for an annual $40 and 0.10% (fund expense ratios apply). Furthermore, out of the $40 account fee we will apply up to $20 as a TPA fee offset. By example with Gatekeeper our fee is reduced to $20 and 0.10% annually. If your are interested there is a posting that discusses 403b ASP and fees in more detail http://bwise.ibforums.com/index.php?showto...amp;#entry23441

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1) 403b ASP is a company that allows me to get into Vanguard and Janus funds (403b ASP has provided management services for 401k plans and now it is getting in the soon to be lucrative 403b plan management). I'm having a hard time finding info. about 403b ASP. On independent sites, I found that their fees are $40 a year plus 0.1% plus the 1) cost of the mutual fund. I could live with that. However, I stumbled across an asset based fee of 1.78% and a consent deferred sales charge of 1% if I keep money in funds for at least 6 years. I am so nervous about hidden fees... Also, there is a 1% fee for having an advisor. Do I have to have an advisor with 403b ASP??

 

2) Now that my District has limited my options for investments, could my district have some fudiciary responsibility for the bad financial decisions of its vendors?

 

1) Your information about 403b ASP costs is accurate. I could not find it on their website, until I downloaded the account sign-up materials (enrollment kit). There it is clearly stated on the first page of the forms, at the bottom ($40 a year plus 0.1% plus the cost of the mutual funds, which are reflected in the NAV of each fund). (If you currently pay 3 of Vanguard's $15/fund fee for a 403b account, that is the equivalent cost.)

I'm guessing that those other fees you mention are probably from a specific (Janus?) fund. AND I sometimes see the same fund name with different share classes. It's always good to do your homework!

 

The advisor option is entirely up to you, not required. As noted, they are just getting into this arena, and though the website promises to have a list of recommended advisors, it is not there yet...

 

I used the link form the website, emailed their customer service dept. with my questions about available funds and true costs, and got straight answers and information that way. I even got an Excel spreadsheet listing of every fund they currently offer.

 

2) I have asked on another topic thread, can anyone show me where the new 403b regs actually state that the district is a fiduciary? I have not found it, nor have I received an answer from the forum in 2 weeks.

 

P.S. Oops, I guess James Olson beat me to it by a couple of hours! See previous entry in this topic.

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I've been checking with the various NY school districts that have Omni as A TPA, and both VAnguard and T Rowe Price have recently been added as investment companies. Check with Omni Financial. Tim

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I'd stay far away from Omni.

 

Use 403bASP or if you're looking for a Compliance TPA consider JEMTPA, they have an agreement with Vanguard and actually do real compliance.

 

ScottyD

 

 

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Unfortunately, my district has already crossed the Rubicon and picked their TPA. They did not take my advice and assemble a committee of stakeholders to help in the process. What they got is CPI, who is covering their responsibilities, but not doing much for the employees. I can't get straight answers from them as to contacts for the approved vendor list, even! The district has its a** covered, so, unless I want to start a revolution, we are stuck with CPI for a long time :-(

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Stay far away from OMNI?

 

Scotty,

It's been a long time since you added to this post, but I was expecting your warning to get a lot of conversation going.

I am curious why you warn us about Omni. If they are willing, as it seems from other posts in this thread, to sign with low fee companies, then what are the other issues that should concern us?

Your reputation precedes you, so when you warn, I take notice!

Thanks,

Gordon

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Stay far away from OMNI?

 

Scotty,

It's been a long time since you added to this post, but I was expecting your warning to get a lot of conversation going.

I am curious why you warn us about Omni. If they are willing, as it seems from other posts in this thread, to sign with low fee companies, then what are the other issues that should concern us?

Your reputation precedes you, so when you warn, I take notice!

Thanks,

Gordon

 

 

Signing with a low fee company and actually providing compliance are two different things. I know a lot about how Omni attempts compliance. That is about all I can say on a public message board. If you want to have a private conversation, perhaps I could expand. If I actually expanded here I'd probably be sued by the end of next week (Yes, you can get sued for telling the truth).

 

ScottyD

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I will add to that theme that signing providers is the easy part.

 

We will all see in the coming years both from a compliance point of view and remittance of funds point of view that some companies over sold what they can deliver. We will see that some companies never had a chance at delivering what they have promised.

 

The shake out will be felt, it will also give rise to others to provide what those currently have no ability to deliver on. The signing of paperwork anyone can do, delivery of real service will the be the real sign of who sinks or swims.

 

 

Stay far away from OMNI?

 

Scotty,

It's been a long time since you added to this post, but I was expecting your warning to get a lot of conversation going.

I am curious why you warn us about Omni. If they are willing, as it seems from other posts in this thread, to sign with low fee companies, then what are the other issues that should concern us?

Your reputation precedes you, so when you warn, I take notice!

Thanks,

Gordon

 

 

Signing with a low fee company and actually providing compliance are two different things. I know a lot about how Omni attempts compliance. That is about all I can say on a public message board. If you want to have a private conversation, perhaps I could expand. If I actually expanded here I'd probably be sued by the end of next week (Yes, you can get sued for telling the truth).

 

ScottyD

 

 

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I will add to that theme that signing providers is the easy part.

 

We will all see in the coming years both from a compliance point of view and remittance of funds point of view that some companies over sold what they can deliver. We will see that some companies never had a chance at delivering what they have promised.

 

The shake out will be felt, it will also give rise to others to provide what those currently have no ability to deliver on. The signing of paperwork anyone can do, delivery of real service will the be the real sign of who sinks or swims.

 

 

Stay far away from OMNI?

 

Scotty,

It's been a long time since you added to this post, but I was expecting your warning to get a lot of conversation going.

I am curious why you warn us about Omni. If they are willing, as it seems from other posts in this thread, to sign with low fee companies, then what are the other issues that should concern us?

Your reputation precedes you, so when you warn, I take notice!

Thanks,

Gordon

 

 

Signing with a low fee company and actually providing compliance are two different things. I know a lot about how Omni attempts compliance. That is about all I can say on a public message board. If you want to have a private conversation, perhaps I could expand. If I actually expanded here I'd probably be sued by the end of next week (Yes, you can get sued for telling the truth).

 

ScottyD

 

 

 

Isn't the ability to deliver services that will allow the plan to comply with the IRS regs the reason why sponsors such as SD need to have hold harmess and indemnification agreements from the TPAs to protect the sponsor from liability in the event the plan does not comply with the IRS rules. A number of low cost providers withdrew from the 403b market because of their inability to provide such protection to the plan sponsors and plan sponsors will need protection from any provider or TPA under the plan. Of course, a low cost fund could be offerred to a plan by a broker which will agree to protect the SD/TPA from liability as was agreed to in 300 PA school districts which now offer VG through a brokerage which is an option under each SD's plan.

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Hannibal,

I work for 403b ASP, so allow me to answer a few questions. Answers below, in green:

 

 

My school district has hired Gatekeeper as our "hold harmless" administrator. Unfortunately I can no longer directly invest with no-load providers such as Fidelity or Vanguard. My choices are insurance companies...

I have two questions and one statement of what I think I need to do.

 

1) 403b ASP is a company that allows me to get into Vanguard and Janus funds (403b ASP has provided management services for 401k plans and now it is getting in the soon to be lucrative 403b plan management). I'm having a hard time finding info. about 403b ASP. On independent sites, I found that their fees are $40 a year plus 0.1% plus the cost of the mutual fund. I could live with that. However, I stumbled across an asset based fee of 1.78% and a consent deferred sales chared of 1% if I keep money in funds for at least 6 years. I am so nervous about hidden fees... Also, there is a 1% fee for having an advisor. Do I have to have an advisor with 403b ASP??

403b ASP is a record keeper that acts as a vendor in 403(b) plans. As you state, our fees are a $40 account fee and now 0.15% (for new accts) custodial/admin fee. In Gatekeeper plans, we only charge $20 instead of the $40, as Gatekeeper charges their TPA fees separately. Any further costs; internal fund expenses, advisor fees, TPA fees - none of these come to 403b ASP. This is why we have no problem allowing participants to use no-load funds, and/or funds with low expense ratios. I'm not sure what the asset-based fees or the deferred sales charges are that you are referring to, but they are not from 403b ASP. To your other question, no, you do not have to have an advisor. You can certainly self-direct your account.

 

 

2) Gatekeeper offers 14 different vendors, predominately insurance companies or companies like 403b ASP and ING which are middlemen that seem to be getting too big a piece of my pie. Some of these vendors, such as Metropolitan Life Insurance Co, are in financial trouble. Now that my District has limited my options for investments, could my district have some fudiciary responsibility for the bad financial decisions of its vendors?

 

My plan is to make sure that I do NOT roll my current 403b monies into one of these robber-barrons. I will max my ROTH IRA and look into a 457 through my state. Our distict has a poor history of trying to manage our 403b accounts. They signed up with Horizon Benefit as a hold harmless company that also sold investment products and was found to embezzle 403b monies. Needless to say, we got our District to drop Horizon Benefit after a year and a half of meetings. I understand that the current situation is different, but I'm tempted to find my legal options...

 

I cannot speak to the feasibility or stability of other firms, but we have experienced great growth and expansion, and our service times and accuracy levels have reach all-time highs. I only ask that you do not lump us in with other vendors, who may be troubled, and remember our difference is that, unless restricted by your employer or state regulations, you can have access to over 22,000 funds through us, so you can certainly find no-load funds with low expense ratios available.

 

DaryleP

 

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I only ask that you do not lump us in with other vendors, who may be troubled, and remember our difference is that, unless restricted by your employer or state regulations, you can have access to over 22,000 funds through us, so you can certainly find no-load funds with low expense ratios available.

 

DaryleP

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I am told you are not in California. Why?

Steve

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Unfortunately, my district has already crossed the Rubicon and picked their TPA. They did not take my advice and assemble a committee of stakeholders to help in the process. What they got is CPI, who is covering their responsibilities, but not doing much for the employees. I can't get straight answers from them as to contacts for the approved vendor list, even! The district has its a** covered, so, unless I want to start a revolution, we are stuck with CPI for a long time :-(

 

More than 18 months after the switch, CPI finally got their act together and we now have Vanguard available. Whew!

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Unfortunately, my district has already crossed the Rubicon and picked their TPA. They did not take my advice and assemble a committee of stakeholders to help in the process. What they got is CPI, who is covering their responsibilities, but not doing much for the employees. I can't get straight answers from them as to contacts for the approved vendor list, even! The district has its a** covered, so, unless I want to start a revolution, we are stuck with CPI for a long time :-(

 

More than 18 months after the switch, CPI finally got their act together and we now have Vanguard available. Whew!

 

 

Congratulations!

Steve

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