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Lausd Vender List, Fidelity Grandfatherd?

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Scotty,

 

AIG does have an additional agreement and that started the problem. LAUSD says that AIG sent the agreements and I have an email from AIG that states that LAUSD sent the agreements.

 

Greg Kildare is quoted as saying that they are unhappy with AIG's administration. So is it not a stretch that there could have been a problem getting these agreements.

 

These companies did not get the agreement so they did not return the agreement and that's why they are not on the list. They are more than willing to sign the agreement. They signed the ISA just a few months prior.

 

LAUSD basically told these companies "too bad you did not get the agreements but the deadline was 10/17/08. While I think that its a bad deal because there is obvious confusion about who sent the agreements and where they were sent. (they have no tracking numbers etc...) it gets even worse when they then go against their word and add Tiaa-Cref on 11/14/08.

 

Why? They said because of "negotiations" with Tiaa-Cref.

 

Well, What could have Tiaa-Cref said that FTJ fundchoice didn't say? FTJ has an agreement. It's an obvious oversight on behalf of LAUSD or AIG but they turn a deaf ear to them and say too bad...oh but Tiaa-cref can be on the list.

 

It just doesn't make sense.

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It's my understanding (and please tell me if I'm wrong) that no more companies will be added to the list. There are many companies right now that are not only willing to sign the ISA but already have signed the ISA that are not allowed on the list.

 

Mr. Schullo, I believe you have received the signed ISA from FTJ fundchoice via Scottyd as proof that this is going on.

 

There seems to be a double standard. LAUSD says that absolutely no other companies will be added to the list as of 10/17/08...and then they add Tiaa-Cref on 11/14/08. LAUSD is not willing to explain why Tiaa-cref was given this courtesy and other companies have not.

 

So how can Fidelity be added now "if" they sign the ISA. I think they will have to wait until 1st qtr '09 when they may open it up to more companies.

 

 

Sorry for the delay. I was in Vegas watching 62 year old Bette Midler's great performance.

Yes I forwarded the information via Scotty to LAUSD. Another company also wrote a letter to UTLA and that too was forwarded to LAUSD.

 

Who is saying all of this that you report here: Who? Who in LAUSD says that "absolutely no other companies will be added to the list as of 10/17/08? I know all of the players at LAUSD and AIG? Who said that? How can LAUSD "not explain why TC was given the courtesy and other companies are not." What are you talking about?

 

Our next open 457b meeting is, Thursday, December 4th at 3:00 on the 28th floor. Any LAUSD educator concerned about their retirement plan is welcome to attend, meet the committee and ask your questions.

 

Steve

 

 

 

How about you prove to all of us that this in NOT happening? You know all the players right? Why don't you tell us why these companies are not being allowed on the list.

 

You asked for proof about the ISAs and I sent it to you. But you don't believe the rest of the story.

 

Its your turn to provide proof that this is not happening.

 

So I will answer your questions the best I can...then I want you to investigate and tell us why the companies with signed ISAs are not on the approved list.

 

Ms. Wendolyne Traylor, Benefits Manager is who is saying what I report here. I have sent you a copy of a signed ISA with FTJ (I have others) who acted in good faith and they are not on the list. Isn't that proof enough that something is wrong?

 

You obviously have seen the signed ISA for FTJ. And they are not on the list. Can you tell me why?

 

I asked Ms. Traylor about the TIAA-Cref situation and her response was typically vague:

 

"TIAA Cref was added after the October 17, 2008 deadline because of negotiations between AIG and TIAA Cref that were completed on or around November 14, 2008."

 

I have this email if you would like to see it.

 

So there are all these other companies that already have executed ISAs and they call and call and get no response. Then Tiaa-cref gets added because of "negotiations". Does this seem right to you steve?

 

I have the names and contact numbers for these companies. If I give them to you will you call them and verify that they have been trying to get on the list.

 

Mr. Kim Chin from Pacific Life spoke with Greg Kildare and Greg told him that they will not be allowed on the list. (maybe next year) Yet Pacific Life has an signed executed ISA dated 6/4/08.

 

Is Pacific Life on the list? No. Is that not proof?

Was Tiaa-Cref on the list on 10/17? No. Did they get added on 11/14? Yes. Is that not proof of the double standard?

 

If I send you the emails from Wendolyne stating that no companies will be added to the list as of 10/17/08 will that help? If I send you a copy of the email from AIG to FTJ stating that LAUSD sent the provider agreements and then send you the email from Ms. Traylor stating that AIG sent the agreements will that help show that there is confusion about this crucial form?

 

There is a qoute on this thread that says that Greg Kildare stated on Sat that they are unhappy with the way AIG is adminstering. Yet you keep questioning me?

 

The proof is on the list. There are companies that want to be on the list that have signed ISAs and they are not on the list. Isn't that proof enough?

 

I have the emails to prove what is being said

You have proof that companies with signed ISA's are not being allowed on the list.

I have emails showing/proving that there is confusion about who sent the provider agreements

Greg Kildare has stated that they are unhappy with AIG

 

Is that enough Steve?

 

Please tell me what you would like to see and I will send it off to you.

 

Then I want you to post on this board that I provided proof and that these companies are being treated unfairly?

 

 

Just as an aside and clarification - ISA's are not required by law and a standalone ISA would seem to be a bad policy. Could it be that AIG has a new agreement that is a much more broad agreement that these companies have not seen or signed? Not sure who needs to talk with whom, but perhaps the ISA was simply for those vendors who wanted to do transfers and not have them be deemed distributions come 1.1.09 and thus taxable (yes, I am aware of the correction procedure).

 

This is the avenue I would pursue.

 

ScottyD

 

 

Scotty,

After reading your post, I recall and it was my understanding that there were (is) two agreements as you state. But the differences have never came up at our committee meetings.

Also, I ran a Google search and came up with samples of the two ISA agreements but had the identical language. One would think that the language of the ISA for a vendor who wanted to do transfers only would be less restricted. I saw no differences in the samples I read.

Steve

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Is the issue here that FTJ is not on the list? Is that the problem?

 

I'm not familiar with FTJ ... Is that the same as FTJ FundChoice? If so, how on earth could anyone but a salesman want it on the list of approved vendors? According to 403b Compare, this company charges:

 

- .3 for an annual asset based fee.

- between .50 and 2.10 for an adviser fee. (Are you kidding me?!)

- the normal fund management fees as well, e.g., 1.40 for Calamos Growth.

 

Again, I'm not sure we are talking about the same company, but if so, then investors in FTJ FundChoice are getting absolutely hosed with fees. Who on earth at LAUSD even wants FTJ FundChoice?

 

 

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Sschullo, I'm perfectly calm.

 

A little bit frustrated. But calm. You've asked me for proof and I thought I provided proof. I thought that this was a pretty clear situation. I have already brought this up to Wendolyne with no luck. They obviously don't want to discuss this issue anymore.

 

Then I send you the proof your asking for (the signed ISA) but you don't respond. I realize that your part of the team so it would not look good if you posted that something doesn't look right. Then you ask me who I have been talking to and I tell you. But you don't say that something seems wrong with the situation. You tell me to calm down and come to a meeting.

 

This is not about me. I thought YOU would be interested that this situation was mishandled.

 

I can offer the now more expensive products to the LAUSD employees that LAUSD and AIG did allow on the list. Move from a fee based program to a much higher commission based Oppenheimer Funds portfolio and offer the fee-based program using Vanguard Funds to my clients in other school districts. I'm not losing anything in this situation, your employees are.

 

I thought that, even though this situation does not effect you personally, that you would be interested because it seems like it was not done correctly. If your okay with how this was handled. Then I'm okay too.

 

I have provided you with enough proof for you to either take action and verify that something wasn't handled correctly or you can turn your back.

 

I am going to send my info to the reporter that you mentioned and to a special investigator that contacted me.

 

You will not hear from me again regarding this issue.

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I feel there are very few companies on the larger, original LAUSD list of approved vendors that are in teacher's long term best interest and hence are worth fighting for (to have them carried over to the new list). The following companies, in my personal opinion, offer (relatively) inexpensive and competent investment management, and have decent institutional reputations:

 

TIAA-CREF

CalSTRS

Fidelity

USAA

 

It's possible I may have missed one or two companies - but believe me, the final list of worthwhile companies to invest one's hard earned money in is very small.

 

Steve Schullo has done an excellent job of getting the word out to educators that there is almost no one in this whole affair - not our unions, nor school district, and certainly not the vast majority of the original 150+ vendors on the LAUSD list - have our best interests at heart.

 

This has been confirmed in the national media recently regarding New York teacher's 403b fiasco, and should be self-evident once one does homework on what constitutes sound retirement investment strategy.

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Hi LA Teacher,

Thank you very much for the acknowledgement. UTLA, under the leadership of the treasurer, David Goldberg and Retirement Issues Committee Chair, Sandy Keaton, have led UTLA to implement a 180 degree turn around this year with regard to now offering financial information seminars that was held on November 22, 2008. For years Sandy and I have been frustrated with UTLA. But times have changed. We are planning on another seminar next spring.

 

BTW, it takes a lot of planning and work to put together the workshops that you attended. We had over 60 UTLA members in attendance and stayed the entire 3.5 hours. If you or anybody else would like to volunteer to help organize this or lead a breakout session, let us know.

 

You list of low fee companies is not just your personal opinion, but it’s a fact.

 

Have a great day,

Steve

 

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Good Morning! I too am dealing with the LAUSD change in plans and have some definitive info for you.

 

I spoke with the Fidelity Managers for their 403b's They stated that the "grandfathered" clause on their name refers to the fact that the LAUSD teacher is able to leave their money with Fidelity BUT will be UNABLE to make any new contributions as of 1/1/09.

 

Fidelity told me that they do not want to have the client pay extra to have money sent to them via a third party ( in this case AIG/Valic for lausd) and then Fidelity will have to pass on their expense as well to us.

 

I then called LAUSD ( Retirement officer, Anna Rozezadeh ) she is in charge of the 403b's. She also reiterated that the "grandfathered" and the "3" by Fidelity in our choice list meant: WE MAY KEEP THE MONEY WE HAVE WITH FIDELITY HOWEVER NO NEW MONEY AS OF JANUARY 1, 2009 will be sent to Fidelity.

 

 

For all of the teachers who've wrote that they will "see" what happens with their Fidelity/ Lausd account, I encourage you to call Fidelity for yourselves and then to find a vendor you can live with.

 

I deleted the phone numbers for lausd and for Fidelity... is it ok to post them?

 

 

 

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Steve,

 

Over the last 12 months, I've done a tremendous amount of self education and research and put together a very tightly packed two page pdf of three basic sound investment strategies for a tax deferred retirement account, and included about 5 sample portfolios from TIAA-CREF, Vanguard, Dodge & Cox, Fidelity, AIG/Charles Schwab that I have shared with a few friends. I wouldn't mind leading a break-out group sharing this info in the context of "one teacher's self -educated approach to retirement investing".

 

As I'm sure you are aware, many of us teachers have never graduated from the mainstream viewpoint which is that the best solution is the common solution. And the known names are the safe players. "Yeah, I've heard of Met Life before - isn't that the company with the cute Charlie Brown ad? I like Charlie Brown! - isn't that like - Walt Disney? (Nope, Charles Shulz) 'Insurance' sounds so reassuring. I guess I'll go with MetLife".

 

Which of course, is better than not saving at all.

 

I'm glad to hear that UTLA is on the same page now. I would have liked UTLA to have been doing the type of educating you've been doing about 403b's for the past decade. They could have reached so many people with the monthly newsletter. But I understand the legality issues. But still!

 

Many teachers at Nov 22 meeting were expressing a thirst for knowledge from a source they could trust. They didn't get it in the short time frame, but a spark was lit. And yes, they do need to do more self-educating.

 

Andre

 

PS: Thank you, Officer Malloy for the info on Fidelity. This is Officer Reed, over and out.

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