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makouri

Help!

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I have been on here in the past and kept an eye every now and again. Thanks to all for your advice througout that time. Well, now I, and my fellow teachers, need help. Just got an email from our Asst. Supt. about the 403b changes as of Jan 1, 2009. In short, his email listed a bunch of rule changes in accounting then let us know that:

 

A: the Omni group (haven't researched them yet, figured I'd come here first) is going to be the 3rd party representing our 403b/457 plans with their chosen vendors.

 

B. Fidelity and Vanguard will probably (which means for sure) will not be on the approved vendor list as they have for all 13 years of my teaching, all of which I've contributed dilligently to Vanguard.

 

I called Vanguard and they told me it's because they would not sign the Information Sharing Agreement my district told them to because Vanguard has their own and will not waiver.

 

I immediately notified our union president and vice president and typed in all caps that I'll do whatever I have to but we are NOT losing these providers.

 

ADVICE PLEASE.

 

 

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Good luck! I'm waiting for a memo canceling our Vanguard option as well. I'm not sure what you can do since Vanguard simply will not bend or budge on the information sharing agreement.

 

Dan Otter who runs this website has warned us things could get worse before they get better. I would think you might be paying more in terms of fees. No way will your new plan offer better choices than Vanguard.

 

 

Take a look at what is available before you panic. If things look bad in terms of fees I would simply ditch the 403B and invest in Roth IRA and Taxable accounts with Vanguard. Vanguard has some tax managed funds and index funds which would be a good bet as well. You will lose the tax deferral but I think if the fees under your plan are high you will come out better go Roth and Tax Efficient funds

 

 

 

Another option is to only invest in bonds in the 403B which usually have lower expenses than equities. Then again if their is a 1% management fee for your account then don't do it. Paying over 1% plus an expense ratio for a bond fund is foolish.

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Re: Vanguard

 

I've had my 403b assets "frozen" but earning interest (until NOW) in Vanguard for over 10 years now, I think, after they didn't sign the hold harmless agreement back then. They never threatened to dump my funds, and in fact, a few years ago I made it into "Voyager" (well, that's because they lowered the required holdings) and have moved my funds around a bit, within the retirement account.

 

Janus, on the other hand, is dumping me, and after reading the 7.1 regulation on another topic in this forum, I don't think I want to leave the money with Janus and "see what happens". I'm moving it to another account I have, then looking to see if I have access to CalStrs.

 

The Roth/IRA is an interesting idea, but I think the limit for contributions is SO much lower...

 

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It's not Vanguard I worry about so much, I will contact them and leave a post on this board regarding their answer. My concern is with the school district trying to have everyone be with one of their preferred high fee providers. I have already decided to stop using our plan going forward as their are no low cost providers. Obviously Janus is making this decision in your case, what a slim ball thing to do. They took your money now they do not want to maintain accounts, putting you in a bad position.

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