Jump to content
bruceinwayne

We're Keeping Vanguard, How About You?

Recommended Posts

Hi Everyone,

 

It's been a while since I've posted but that's because I've been busy making sure my district here in New Jersey keeps Vanguard.

 

Three years ago I worked my tail off to get my district to approve Vanguard as a 403(b) vendor. Then I rested.

 

A year ago, with the new regs on the horizon, I got back to work.

 

I began e-mailing the Business Office in 2007 requesting a meeting to discuss their plans for meeting the new regs. They ignored me, but I was cc-ing my Union President and Board President on all my e-mails. Over time, I was able to convince my Union President how important it was that we don't allow the district to take away our access to Vanguard. The Board President has been extremely sympathetic to my concerns as well.

 

On December 8th we finally had our meeting with the Business Administrator, where we were told that the district would be using Great America Plan Administrators as the TPA and we would be losing Vanguard. We were told, "the people with Vanguard will just have to pick a new provider," as if there was no difference between Vanguard and the 5 Insurance Companies I could choose from. Needless to say I was seething. We were also told that Great America performed the TPA services for free to both the district and the participants. That struck me as very suspect.

 

After the meeting we put together a packet of articles for all the Board Members showing the importance of having a low cost 403(b) provider in the district and the Union President wrote a letter on behalf of the Union Membership stating the same.

 

On Dec 11th, I spoke at the Board of Education Meeting to the importance of keeping a low cost 403(b) provider in our district. (The approval of Great America as the TPA has already been withdrawn from the agenda so I knew we were in good shape.) The Board Members listened, and of the 5 who spoke, they all essentially stated, "this is the teachers plan, and if they want Vanguard, then they should be allowed to keep Vanguard."

 

How this plays out moving forward is unknown. As of January 1st, the district will be managing the plan, and it will certainly take a while for them to get the mechanisms in place to adequately run the plan, and in the future, we may need to fight this fight again, but for now Vanguard is safe.

 

It should be said that I have been very outspoken in the 403(b) world in my district for a few years and I have earned enough respect that when I speak about 403(b)'s, the Board Members are willing to listen, and they trust what I have to say, but there is no reason YOU can't do the same in your district.

 

Turns out that the power of the truth makes a very compelling argument.

 

Just because your district has already decided what to do moving forward does not mean they can't change. Get out there and fight for what you know is right.

 

Good Luck.

 

Bruce

Share this post


Link to post
Share on other sites

Will VG be an option under the same plan with the 5 insurance companies or will VG be in a separate plan maintained by the SD?

 

Who will be responsible for making sure that all of the rules ($ limits for 403b contributions, universal availabilitry) are complied with if there is no TPA on Jan 1? The SD?

 

Will transfers be permitted between VG and the other options?

Share this post


Link to post
Share on other sites

Great work Bruce,

Thats what happens when one is persistent and explains why this is in the best interests of educators. It is never easy and you may be called names by high priced vendors, but this is the price we all have to pay to reform this terrible system.

Happy holidays,

Steve

Share this post


Link to post
Share on other sites

Will VG be an option under the same plan with the 5 insurance companies or will VG be in a separate plan maintained by the SD?

 

Who will be responsible for making sure that all of the rules ($ limits for 403b contributions, universal availabilitry) are complied with if there is no TPA on Jan 1? The SD?

 

Will transfers be permitted between VG and the other options?

Now Intruder, let's not rain on Bruce's parade. He did a great job, and the district seems to be willing to do what is necessary to make Vanguard an option. Congratulate him!

Share this post


Link to post
Share on other sites

 

 

Bruce

 

 

I must say you are the man of the hour. I have contacted my business/personnel director about allowing us to

keep Vanguard another year since an extention has been granted and he no longer responds.

 

 

Should I contact school board members directly? I don't think teachers recieved much imput in the process and I don't want to get on my employers bad side but this is important.

 

 

Could you supply me any info on how you proceeded beyond what you told us?

 

 

 

Thanks

 

 

Tony

Share this post


Link to post
Share on other sites

Tony,

 

When I was first trying to get Vanguard in 3 years ago, the first thing I did was ask to meet with the business administrator. He told me that the Board was, "not interested in adding Vanguard at this time."

 

He didn't know what he was talking about and had no idea even what Vanguard was so he was a dead end. Next, I wrote a 5 page letter and sent it to each Board Member explaining how fees erode away retirement savings and one of the Board Members was a college professor and knew a little bit about 403(b)'s and she was nice enough to e-mail me back and say "tell me more." It was through her that my efforts started to gain some traction.

 

It's my opinion that if even one Board Member takes an interest in your cause, you have the foothold you need to make a difference. As we all know, all it takes is a good education about 403(b)'s and you understand why Variable Annuities and the fees they charge have no place in our 403(b) plans.

 

So you answer your question, YES, I would definitely e-mail your Board Members and find out why they don't think you should have a low cost option. The chances are they will have no idea what you are talking about, but one of them might be willing to learn.

 

As a good friend told me, "when you speak to the Board of Education, speak honestly, speak with passion and conviction, and hope that someone cares enough to listen."

 

We will only get what we are willing to fight for.

 

Bruce

Share this post


Link to post
Share on other sites

Hi Tony,

Agree with Bruce. In fact, I did the very same thing and it was that one board member who invited me to his office to talk about this and this started a ten year relationship. I also got an invitation from another board member's aide. This aide also came to one of our 403baware meetings. As we all know, typically board of education members know so little about any of this but somebody in their inner circle knows what we are talking about.

 

Just one other thought. I have known all along that writing a letter is still powerful. Emails are not enough, but a letter still carries a lot of weight. It helps to clarify in our mind what the heck is it that we want to change and how to do it. You must specify the why and the how. Offer solutions.

 

My last letter was to my pension fund to the CEO. Every California educator got a letter from the CEO attempting to make us feel better because our pension is safe despite the financial turmoil. I thought was so dummied down that it was insulting to the intelligence of educators. I suggested that the letter should have addressed why our pension plan is safe (because of diversification and asset allocation of bonds, domestic and international equities) NOT tell us in vague generalities and ending that the US Constitution says so, OH PLEASE! Furthermore, I thought it was inappropriate to put a plug in for their home loan program! (Click here). I also sent it to most but not all of the 12 board members.

 

My point is that all of us can teach the bureaucrats a lesson in finances by writing a simple letter. It appears that most people in power, whether in SDs or our pension plan, have never been challenged. SDs and pension plans need to hear from us, the consumer. In a democracy where we have freedom of speech, especially on something we care about, we have a duty to speak out. Its our responsibility and its our financial security.

 

Good luck,

Steve

Share this post


Link to post
Share on other sites

Hello,

 

I'm not sure if others have spread the good news here but Omni and Vanguard (and also Omni and Fidelity) have entered into the ISA. I was planning on pulling the plug this week due to being forced out by Omni. I had emailed Vanguard and Omni and both had explained they could not come to an agreement as recently as two weeks ago.

 

A few days ago I received a letter from Vanguard basically explaining that they would be doing business with one another and that, rest assured, clients would be able to continue investing without a hitch. Sure enough, Vanguard is now on the "approved" list on Omni's website.

 

Yes, Virginia, there is a Santa Claus.

 

Happy Holidays

Share this post


Link to post
Share on other sites

dcfas,

Congrats! Could you tell us the specifics of the agreement that VG agreed? It would be instructional for the rest of us who want VG on our list but they will not sign the agreement for unspecified reasons.

Thanks,

Steve

Share this post


Link to post
Share on other sites

I will tag on to Steve's request. Our district has hired CPI, and they and Vanguard are stonewalling each other, each insisting on their own ISAs... I am trying to reason with CPI, that if they can review and agree with Vanguard's ISA, there are a lot of school districts and employees that they could be getting fees from!

Share this post


Link to post
Share on other sites

dcfas,

Congrats! Could you tell us the specifics of the agreement that VG agreed? It would be instructional for the rest of us who want VG on our list but they will not sign the agreement for unspecified reasons.

Thanks,

Steve

 

 

Sorry for the delay. They have given no specifics.

 

Here is their letter to me:

 

Dear Mr. xxxx:

 

You recently contacted us about your 403(b)(7) plan. Since our previous

response, we've received updated information to share with you. We're

pleased to announce that Vanguard has reached a mutually agreeable solution

with The Omni Group, a large third party administrator for 403(b) plans.

 

Vanguard and Omni have been working closely to ensure the continued

availability of Vanguard mutual funds to their clients. We felt that the

requirements outlined in Omni's Information Sharing Agreement were ones

that Vanguard could meet reasonably and cost-effectively. As a result, a

considerable number of 403(b)(7) participants may be able to continue

investing with Vanguard after 01/01/2009 (the effective date for the new

403(b) regulations).

 

If your employer is using Omni's services, please visit Omni's website

(www.omni403b.com) to verify whether Vanguard is an approved vender for

your plan. To view the list of service providers selected under your

employer's plan, you should select your organization from the "Client Home

Page" and review the "Participating Service Provider" list.

 

If you have additional questions, please call us. You can

reach us on business days from 8 a.m. to 10 p.m. and on Saturdays from 9

a.m. to 4 p.m., Eastern time.

 

Sincerely,

 

Vanguard

 

© 2008 The Vanguard Group, Inc. All rights reserved. Vanguard Marketing

Corporation, Distributor.

Share this post


Link to post
Share on other sites

Hi to all!

 

I do admire Bruce for what he has done to keep Vanguard... How I wish I can follow his great work!

 

I am new in 403b - basically new in retirement and mutual funds. I just started to contribute middlle of last year with Vanguard. However, I am very much dissapointed when I found out this week that it is no longer in my school vendor's list. I made several phone calls to Vanguard, school's Human Resource, and TSACG (3rd party consulting group). I was informed that the ISA/Vendor's agreement did not go well with them. I am clueless on what to do next. I believe that Vanguard is one of the best company and well known for no load funds but I do not have the facts and data to convince the school board to keep Vanguard. I am just starting to learn.

 

At present, I am looking for good company to open an account to continue my 403b contributions. Among the list, Fidelity Investment is one of them... Is it good option? I feel so lost, please help!

 

Lui

 

 

 

 

 

 

Hi Everyone,

 

It's been a while since I've posted but that's because I've been busy making sure my district here in New Jersey keeps Vanguard.

 

Three years ago I worked my tail off to get my district to approve Vanguard as a 403(b) vendor. Then I rested.

 

A year ago, with the new regs on the horizon, I got back to work.

 

I began e-mailing the Business Office in 2007 requesting a meeting to discuss their plans for meeting the new regs. They ignored me, but I was cc-ing my Union President and Board President on all my e-mails. Over time, I was able to convince my Union President how important it was that we don't allow the district to take away our access to Vanguard. The Board President has been extremely sympathetic to my concerns as well.

 

On December 8th we finally had our meeting with the Business Administrator, where we were told that the district would be using Great America Plan Administrators as the TPA and we would be losing Vanguard. We were told, "the people with Vanguard will just have to pick a new provider," as if there was no difference between Vanguard and the 5 Insurance Companies I could choose from. Needless to say I was seething. We were also told that Great America performed the TPA services for free to both the district and the participants. That struck me as very suspect.

 

After the meeting we put together a packet of articles for all the Board Members showing the importance of having a low cost 403(b) provider in the district and the Union President wrote a letter on behalf of the Union Membership stating the same.

 

On Dec 11th, I spoke at the Board of Education Meeting to the importance of keeping a low cost 403(b) provider in our district. (The approval of Great America as the TPA has already been withdrawn from the agenda so I knew we were in good shape.) The Board Members listened, and of the 5 who spoke, they all essentially stated, "this is the teachers plan, and if they want Vanguard, then they should be allowed to keep Vanguard."

 

How this plays out moving forward is unknown. As of January 1st, the district will be managing the plan, and it will certainly take a while for them to get the mechanisms in place to adequately run the plan, and in the future, we may need to fight this fight again, but for now Vanguard is safe.

 

It should be said that I have been very outspoken in the 403(b) world in my district for a few years and I have earned enough respect that when I speak about 403(b)'s, the Board Members are willing to listen, and they trust what I have to say, but there is no reason YOU can't do the same in your district.

 

Turns out that the power of the truth makes a very compelling argument.

 

Just because your district has already decided what to do moving forward does not mean they can't change. Get out there and fight for what you know is right.

 

Good Luck.

 

Bruce

 

 

Share this post


Link to post
Share on other sites

Liu,

 

Fidelity is an excellent company, on par with Vanguard in my opinion. Just make sure you aren't getting access to Fidelity funds through a 3rd party provider like an Insurance Company. Often times I have heard someone say that they have Vanguard in their district, only to find out that it is actually just access to Vanguard Funds through another provider which of course would result in high fees for low cost Vanguard funds.

 

If in fact you do have direct access to Fidelity, consider yourself lucky, we seem to be a dying breed.

 

Bruce

Share this post


Link to post
Share on other sites

Thanks for immediate reply, Bruce! I do appreciate it...

 

Just this afternoon, I had face to face meeting with a Fidelity local agent which I contacted via my school's website. It was a big dismay to find out that she was a broker (middle person, am I right?), not directly connected to Fidelity. So I am doing more research on how to open directly an account in Fidelity, which I did with Vanguard... Whew, lots of hassles but I am thankful that I am forced to learn :-)

 

It's a big help to get information from this group as I am reading some of your discussions. My first retirement account (403b) was opened in Metlife as a variable annuity. After a month of reading books and online research, I found out it was a big mistake :-( Then, I got into Vanguard which I am very happy and I am planning to continue my Roth IRA in it... I hope Fidelity would be great, too!!!

 

 

Lui

 

 

 

Liu,

 

Fidelity is an excellent company, on par with Vanguard in my opinion. Just make sure you aren't getting access to Fidelity funds through a 3rd party provider like an Insurance Company. Often times I have heard someone say that they have Vanguard in their district, only to find out that it is actually just access to Vanguard Funds through another provider which of course would result in high fees for low cost Vanguard funds.

 

If in fact you do have direct access to Fidelity, consider yourself lucky, we seem to be a dying breed.

 

Bruce

 

 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

×
×
  • Create New...