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amydare

Texas Isds And Tpa First Financial

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Here's the new list from First Financial 3rd party administrators in a lot of Texas and Southwestern US ISDs.

Are there any good ones on here, or are they all duds? Also, it is my understanding that only former armed services members can make use of USAA; is that correct? One last question: how much would it cost for a small school district, say 500 employees, to get a low-cost plan administrator, rather than a "free" one...? Any guesses?

 

November 24, 2008

TO: All School District 403(b) Annuity Participants

FROM: First Financial Administrators, Inc.

RE: 403(b) Final Regulations and Important Changes

The Internal Revenue Service issued new Section 403(b) regulations for annuity plans in

public school districts effective January 1, 2009. These regulations add cumbersome

compliance responsibilities to employers and annuity vendors. As a result, many vendors

currently offering 403(b) annuity plans are leaving the market and have notified clients.

Examples include AIM, Merrill Lynch, Nationwide, and Van Kampen. Participants may be

allowed to maintain balances with those carriers, but future contributions must stop before

the January 1, 2009, deadline.

The IRS also stipulates that employers are responsible for tracking loans, transfers and

exchanges, hardship withdrawals, etc. and must obtain an information sharing agreement

from each vendor. As your school district third party administrator, it is our responsibility to

contact each vendor on payroll and ensure that our Contract Provider Agreement is signed

and in place before January 1, 2009. Vendors refusing to sign the agreement will not be

allowed to receive contributions after that date.

Included in the new regulations is the requirement that a Plan Document be in place by the

deadline. The Document must include options available (i.e. loans, hardship withdrawals,

etc.) and must list vendors eligible to receive contributions from school district employees.

Please be aware that your current 403(b) annuity carrier may not sign our agreement, and

contributions will cease effective January payroll. Please contact your financial advisor for

direction. We continue to work with vendors to secure signed agreements, and new ones

are added weekly.

The following vendors have signed our Contract Provider Agreement and are

eligible to receive contributions after January 1, 2009, from all Texas school

districts and – if approved for payroll – in Louisiana, New Mexico, North Carolina,

Virginia, and Arizona.

American Funds (only if currently on payroll and ISA in place)

Americo Financial Life

Annuity Investors

AXA Equitable

CM Life

Commonwealth Annuity

Fidelity Security Life

First Investors

Great American Financial

Horace Mann

Industrial Alliance

Kansas City Life

Kemper Investors

Life Insurance Company of the Southwest (LSW)

Lincoln Financial Group

Mass Mutual Life

Midland National

Modern Woodmen of America

New York Life

North American Company for Life and Health

Oppenheimer Funds

Protective Life

Riversource Life

Security Benefit Life

Symetra Life Insurance Company

Thrivent Investment

Thrivent Financial

USAA Investment

USAA Life

United Teacher Associates (UTA)

Waddell and Reed

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American Funds have solid performance, but also front end loads of 5.75%.

Same with Oppenheimer.

The rest sound like they are selling variable annuities which are packed with fees.

But you need to do the research. It is worth the time. Start with websites and then send emails and make calls. You want to see the fees page on the prospectus for any fund. Funds with no front end loads and no 12b1 fees are the way to go if you have the option.

I know of one TPA that charges about $40 per enrolled investor.

Good luck.

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If you don't mind my asking, who is that TPA, and where are they located?

 

 

American Funds have solid performance, but also front end loads of 5.75%.

Same with Oppenheimer.

The rest sound like they are selling variable annuities which are packed with fees.

But you need to do the research. It is worth the time. Start with websites and then send emails and make calls. You want to see the fees page on the prospectus for any fund. Funds with no front end loads and no 12b1 fees are the way to go if you have the option.

I know of one TPA that charges about $40 per enrolled investor.

Good luck.

 

 

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