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Lausd's 403b Vendor List

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Hi,

LAUSD 403b list of approved vendors:

 

AIG Retirement/VALIC

Life Insurance Company of the Southwest

Americo

MetLife

AXA Equitable

Midland National

CalSTRS

Oppenheimer

Great American

PFS Investments, Inc.

Horace Mann

Plan Member Services

Industrial Alliance Pacific

Security Benefit

ING

USAA Insurance Company

TIAA CREF has just been added November 14

 

After years of trying and finally getting Fidelity on the old list, it is not yet signed the new ISA. The new ISA's have technically replaced the old hold harmless agreements.

Steve

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Hi,

Not suprising the TPA's are incentived to offer high cost providers. They are happy to lose beteer low cost options like Fidelity, Vanguard, TIAA-CREF. The whole system needs to be overhauled

 

 

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I was surprised when the list was posted because a company that I use was not on the list. I called and the vendor stated that a mailing from AIG went to all the vendors and had to be returned by a certian date. the vendor stated that they never received the mailing and they have been in contact with AIG.

 

I spoke with another vendor who stated the exact same story.

 

Maybe that explains why Fidelity is not on the list?

 

There has been no feedback on whether these companies, that had signed ISAs with LAUSD and did not receive the mailing, will be added to the list.

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Steve S (or anyone else):

 

I have a follow up regarding the AIG Retirement 403b: Do you happen to know if LAUSD's AIG 403b plan options offer the same mutual funds as the LAUSD AIG 457B plan? If so, I can live with it. I've been maxing out both my 403b and 457b the past year (I am single, and ride the bus - that's how I can do it). I was with Fidelity for the 403b portion. I am really upset to see Fidelity go as a 403b option for LAUSD. But I'm going to keep my money there in hope that in the future either Fidelity or the US governemnt will come to their senses one day. It took me a year of research to come up with some nice investments at Fidelity that I am really happy with. And now this...

 

Regarding the LAUSD 457B: By using the one domestic fund AIG offers in the plan, and an international fund and bond inside the Charles Scwab PCRA "window", I've been able to craft a solid portfolio there as well.

 

I think to say that to give up on the 403b altogether because of the new IRS regulations is too drastic. You gotta think like Warren Buffet, and be a survivor.

 

LAUSD Teacher.

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Steve S (or anyone else):

 

Do you happen to know if LAUSD's AIG 403b plan options offer the same mutual funds as the LAUSD AIG 457B plan?

 

I think to say that to give up on the 403b altogether because of the new IRS regulations is too drastic. You gotta think like Warren Buffet, and be a survivor.

 

LAUSD Teacher.

 

 

Hi LA Teacher,

No, the only mutual funds in LAUSD's 403b at the moment is USAA. USAA is not part of the 457b list.

 

I agree that Warren Buffet has done a lot of things right but I doubt if he would like to pay high fees for investments. I stand by my opinion and its only my opinion that the high fee choices are simply not worth it. When an investor has to pay 1.5% in fees or more, the investment is not worth it. So, its not just a matter of opinion, the high fees multiplied over many years greatly reduces the nest egg. On top of that, the investor still has to pay ordinary income taxes upon withdrawl.

 

If you feel fine with your plan, go for it. For me, fees are a BIG DEAL and a significant drag on ones final nestegg.

 

Do you know how much you are paying for the Charles Scwab PCRA?

 

Hope this helps,

Steve

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Hi,

LAUSD 403b list of approved vendors:

 

Steve,

Yesterday I read a letter from LAUSD informing me that I can't continue my 403(b) with Fidelity. I'm very unhappy about this because, as far as I could see, they had the best deal available for LAUSD employees.

 

What I'm looking for now is the next best option.

 

I'll be sharing my findings at 403bwise where I was happy to see some people already active regarding this situation.

 

 

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Steve, thanks for the info.

 

I got my start with LAUSD 403b investing by reading your online information about 7 years ago, so I am indebted to you for that. You are doing good work.

 

To answer your 457B question (somewhat): The LAUSD's 457B plan through AIG Retirement offers a Schwab brokerage window, making the plan very viable, in my opinion. AIG tacks on only 15 basis points in general to most funds in the core AIG offering of about a dozen mutual funds from the likes of Vanguard, Dreyfus, Janus.

 

If instaed you pass money (either directly from your monthly contribution, or by exchange from an AIG core fund) into the Schwab PCRA window, AIG tacks on small, one time fee (I forgot what it was, but when I inquired with AIG, and performed the calculation on the figure they quoted, I decided is was very reasonable fee.) Once you are inside the Scwab PRCA, it makes sense to invest only in quality low Fee, No-Load, No Transaction Fee funds). I MAY be wrong here, but my recollection is that while the money is accumulating inside Schwab PCRA itself, AIG does not get their 15 basis points - they only get that one time fee as the contribution passed from them into the Schwab window.

 

Regarding the current LAUSD 403b situation: You are correct in that the vast majority of LAUSD 403b vendors are very unattractive due to the poor performane of investment choices, Loads and high fees (for example, Oppenheimer's 5.75% Load and 2.00% redemption fees.

 

But... I am not a Boglehead index fund, buy-and-hold-at-all-costs-guru. I feel some small fees - such as the 15 basis points AIG tacks on to their managed and index mutual funds in our 457B plan is acceptable. BTW, this is purely my personal opinion, there are two or three Vanguard index funds in this AIG 457b plan, which don't interest me nearly as much as the Janus Mid Cap Value - which to my sensibilities - is a world beater.

 

Back to LAUSD 403b problem: I didn't know that USAA is the only one on the current LAUSD approved vendor list (as of November 2008) offering mutual funds. I'm not too sure of that. What about the CalSTSRS plan?

 

I read on the internet (from someone working for CalSTRS as a consultant, that the 403b compliance arm of CalSTRS is in talks with Fidelity Investments (as of November 2008) to have them sign the agreement in those jurisdictions (school districts) where CAlSTSRS has contracted themselves out as 403b compliance consultants. So if CalSTRS 403b Comply can bend Fidelity's arm to sign onto the new 403b regulations in some California school districts, then LAUSD employees may be in luck a year or two down the line to get Fidelity back to LAUSD (and of course, Steve, we would probably need someone's help :). Fidelity just laid off 2,000 employees. They will NEED our money, just as much as we need them.

 

To Steve and other LAUSD employees: Are you aware of the CalSTRS 403b plan called "Pension2"? CalSTRs is on the LAUSD approved vendor list.

 

At least for the Orange County teachers, CalSTRS Pension2 offers a few decent low fee managed mutual funds such as from Vanguard and Dodge and Cox, (but adds on 33 basis points to the underlying fees - this 0.33% is pushing the edge of acceptability to me - but it is better than the other options on the current LAUSD 403b list, by far).

 

I also read that, at least for Orange county teachers, there is a brokerage window available inside this CalSTRS "Pension2" 403b - if you have at least $5,000 accumulated in their money market fund, then you have access to all funds in TIAA-CREF's brokerage service.

 

However, I don't know if this is the same CalSTRS 403b plan that's available to LAUSD employees, if any.

 

I will call CalSTSRS this week and ask about their LAUSD 403b plan. I will report back my results to this web site ASAP.

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USAA Insurance Company is an excellent option. As I remember there are no loads and the expense ratios are very resonable. I think that the only shortcoming is that there are a limited amount of mutual funds to choose from. If I still worked for lausd, i would invest here, as I had several years ago. I haven't researched . but I would not be surpriised if usaa is a better option than Calstrs (somehow I remember that they charge an extra percent to invest, but I can be wrong).

 

 

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I am a LAUSD teacher witjh 403b at Fidelity, which is not on approved list (yet).

 

I called Fidelity this morning, and they said Fidelity is still in negotiations with the district, and to check omni403b.com for current status - although I did check this site and LAUSD is not listed on 0mni403b.com, many other school districts are, and fidelity has neither approved or denied signing on with them yet. So there is hope.

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Hi Steve and everbody. I received my letter Sat. Man, I thought things would get better for us not worse!

I was with CalSTRS when theyfirst opened until I found out they were charging me .95 basis points! And I really had to dig to get the info. It was not disclosed. I still did well because of the hi # of funds to choose from. Since they lowered their fees it could be a good choice.

 

Anyway what do we do now? I called T.Cf. a few years back and the rep said everything they offered lausd were in annuties. The choices are obvious but with a deadline of Dec. 9, I need advice or help with research. Has any one asked the diehards yet?

 

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Steve, thanks for the update.

 

My gut instinct tells me Fidelity will sign on to LAUSD also.

 

I used to be with TIAA-CREF, before I signed on with Fidelity.

 

Now to look a gift horse in the mouth, some people nationwide were beginning to experience problems with customer service with TIAA-CREF. Google TIAA CREF Problems.

 

I don't think problems are fatal, but you need to be aware.

 

 

 

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Hi,

LAUSD 403b list of approved vendors:

 

AIG Retirement/VALIC

Life Insurance Company of the Southwest

Americo

MetLife

AXA Equitable

Midland National

CalSTRS

Oppenheimer

Great American

PFS Investments, Inc.

Horace Mann

Plan Member Services

Industrial Alliance Pacific

Security Benefit

ING

USAA Insurance Company

TIAA CREF has just been added November 14

 

After years of trying and finally getting Fidelity on the old list, it is not yet signed the new ISA. The new ISA's have technically replaced the old hold harmless agreements.

Steve

 

 

 

Hi Steve, Tony and everybody,

 

I received my letter Sat. and we only have until Dec. 9th to decide! I need advice or help with research.

I'm in Fidelity so what are the chances they will sign before then? Or maybe I can park my contributions

some where until we get better choices. Has any one asked the diehards yet?

 

 

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