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sullivanke

403b/457 Fido/vanguard

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A quick question. Our district, among many others, have lost Fidelity as a vendor. USAA seems like the only one on the list offering low cost, index funds.

 

Regarding 457..... Are school ditricts required to offer this to employees? Why do some offer and other not?

Is it easier to get companies like Fidelity/Vanguard onto a 457 than a 403b due to less "oversight">?

 

THANKS in advance.

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A quick question. Our district, among many others, have lost Fidelity as a vendor. USAA seems like the only one on the list offering low cost, index funds.

 

Regarding 457..... Are school ditricts required to offer this to employees? Why do some offer and other not?

Is it easier to get companies like Fidelity/Vanguard onto a 457 than a 403b due to less "oversight">?

 

THANKS in advance.

School districts are not required to offer 403/457 plans to their employees. It is considered an optional benefit, and is up to their sole discretion to offer or not.

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A quick question. Our district, among many others, have lost Fidelity as a vendor. USAA seems like the only one on the list offering low cost, index funds.

 

Regarding 457..... Are school ditricts required to offer this to employees? Why do some offer and other not?

Is it easier to get companies like Fidelity/Vanguard onto a 457 than a 403b due to less "oversight">?

 

THANKS in advance.

School districts are not required to offer 403/457 plans to their employees. It is considered an optional benefit, and is up to their sole discretion to offer or not.

 

_________________________________________________________________________________________

 

 

found out that the 457 is NOT required by employer but school districts are eligible for them.... So my follow up questions that still remain are:

 

1) Is it easier to initiate a 457 and allow companies like Fidelity or Vanguard to be vendors than the 403b? ? ?

 

2) Are the new regularionts, ISA, (Information Sharing Agreements) required to be signed with a 457 as well?

 

3) It seems as though the 457 is very comparable to 403b only subtle differences?

 

THANKS>

 

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sullivanke

 

1) Is it easier to initiate a 457 and allow companies like Fidelity or Vanguard to be vendors than the 403b?

 

Not sure if it is easier to initiate, but it is still asset driven. To get good pricing from Vanguard you need a lot of assets. As of 1.5 years ago, Vanguard stated to me that if would need something like $5+ million in assets to administer a 457(b) plan. Fidelity was a lot different, they wanted at least 5 participants with no minimum asset to be transfered. Not sure if this is still correct or not.

 

Vanguard also works with some smaller independent firms, that are low cost and offer their products! Pension Specialists was one firm they work with in California. There are others.

 

Check out 403(b) ASP. They are a mutual fund platform with very low expenses! See the recent thread on them.

 

I do not have a 403(b), but I have a 457(b) and 401(a). We have four providers: Hartford, AIG Valic, Nationwide and FTJ fundchoice. FTJ fundchoice is the best we have (it is a mutual fund platform) but expenses (or middleman fees) are 85bps plus the index fund expenses. I have been trying to add 457(b) ASP but it is not easy!!!! Management has basically told me one of the current providers will have to leave or be forced out in order to add someone else. Maybe AIG Valic will disappear (I can only hope).

 

My .02 cents.

 

Gerry Le F.

 

 

One more point, does your school district have access to a State 457(b) plan? Some states have good low cost plans. That could be an option?

 

Gerry Le F.

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