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sullivanke

403basp

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I know a thread is already open regarding this platform but I am interested in hearing from anyone on this site who has established 403basp within their district and some feedback. I have got the ball rolling on getting them into our district. Between Dan Otter and James Olson, I have had sufficient answers to my questions. Im just looking to get some perspective from anyone who has established them and has begun contributions.

Another question that I forgot to ask 403basp is how are the available funds selected by the district and is it possible as teachers, for us to influence which funds are chosen. This is from their website:

"403b ASP has access to a universe of over 20,000 mutual funds within over 400 fund families. Many plans are restricted to certain fund families by their district or TPA. You can find your choices in "Review your Plan Investment Options" on your districts plan site within www.403bplan.info."

The .10 along with the annual fee coupled with the mutual fund fee is definetly within my tolerance, ESPECIALLY when I see my other options. This platform seems very compliant with the new regs and if all is valid, should be a no-brainer for us on this board who have had no-load mutual fund companies removed (Fidelity and or Vanguard).....At a minimum, lets get them on the vendor list while we try to straighten out all of the madness in an attempt to get Fidelity back. Clearly this is a better option than the other insurance companies. Thanks for reading and any input that you can share.

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I know a thread is already open regarding this platform but I am interested in hearing from anyone on this site who has established 403basp within their district and some feedback. I have got the ball rolling on getting them into our district. Between Dan Otter and James Olson, I have had sufficient answers to my questions. Im just looking to get some perspective from anyone who has established them and has begun contributions.

Another question that I forgot to ask 403basp is how are the available funds selected by the district and is it possible as teachers, for us to influence which funds are chosen. This is from their website:

"403b ASP has access to a universe of over 20,000 mutual funds within over 400 fund families. Many plans are restricted to certain fund families by their district or TPA. You can find your choices in "Review your Plan Investment Options" on your districts plan site within www.403bplan.info."

The .10 along with the annual fee coupled with the mutual fund fee is definetly within my tolerance, ESPECIALLY when I see my other options. This platform seems very compliant with the new regs and if all is valid, should be a no-brainer for us on this board who have had no-load mutual fund companies removed (Fidelity and or Vanguard).....At a minimum, lets get them on the vendor list while we try to straighten out all of the madness in an attempt to get Fidelity back. Clearly this is a better option than the other insurance companies. Thanks for reading and any input that you can share.

 

 

While the plan sponsor usually the SD, or the TPA will determine who will be the funding entities under the plan, these is no reason why a committee of interested parties could be formed to advise the SD on what investments should be made available in the plan, provided the SD consents to forming the committee. There will be practical problems in that some fund families may not agree to participate on the terms offered by the TPA or for business reasons.

 

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gotcha, thanks.

Has anyone ever heard of the following as rationale as reason to not adopt new vendor? The message below is from Business admin. regarding adopting 403basp

 

We are awaiting their review of our IPSA and plan document. Then, assuming no problems, we will get their info to our Board Attorney to ensure that this ‘platform’ is not a problem for the district. We also have to make sure that crossover is accounted for, if applicable, whereby they may offer products already covered by existing TSA companies.

 

 

 

 

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Sull,

Intruder makes a great point about having employees make recommendations. Might ask your collective bargaining unit or volunteer. Thats what I did to get on my employer's oversight committee. If they refuse, make the point that we are in the era of transparency and not having a committee composed of all stakeholders will make the impression that all decisions are made behind closed doors. Not a good thing.

Our committee drafted the Investment Policy Statement (IPSA?), mission statement and by laws for the committee during the initial meetings. Its very time consuming but a great learning experience. The attorney appointed to the committee by the district consulted. All of these documents are officially approved by the CFO who is the fiduciary. YES! to your question that you can influence vender choices.

Since 403basp is not yet approved by the board, who is drafting your district's documents? Are the meetings open to the public for input?

Steve

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Steve,

 

The Plan Document and IPSA were already drafted. I think what happens is that districts use "cookie cutter" plan language that favor Annuity Insurance Companies. Vanguard and Fidelity not having the resources to investigate each districts plans drafted there own and simply stated, if you want onboard, you oblige to our language............

Fidelity therefore, was removed from our list. They could not sign our documents supposedly....

In the interim while the fight and arguments are being made, 403basp seems like a great vendor to slide in and have available due to their transparency and willingness to sign in light of new regs.

My question involves 403basp's 20,000 available mutual funds and how they are selected by the district if they are approved as a vendor. I would clearly want to to see some Vanguard and Fidelity funds as options.

 

 

Is there anything that can be done AFTER the fact that these documents have been drafted? I cant understand why there wasnt a universally REQUIRED plan that allowed companies like Fidelity and Vanguard to be added or remain?

Next, do these documents have "life-spans" how often do they need to be re-written.

 

The deeper you dig, the more crooked it gets!

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I know a thread is already open regarding this platform but I am interested in hearing from anyone on this site who has established 403basp within their district and some feedback. I have got the ball rolling on getting them into our district. Between Dan Otter and James Olson, I have had sufficient answers to my questions. Im just looking to get some perspective from anyone who has established them and has begun contributions.

Another question that I forgot to ask 403basp is how are the available funds selected by the district and is it possible as teachers, for us to influence which funds are chosen. This is from their website:

"403b ASP has access to a universe of over 20,000 mutual funds within over 400 fund families. Many plans are restricted to certain fund families by their district or TPA. You can find your choices in "Review your Plan Investment Options" on your districts plan site within www.403bplan.info."

The .10 along with the annual fee coupled with the mutual fund fee is definetly within my tolerance, ESPECIALLY when I see my other options. This platform seems very compliant with the new regs and if all is valid, should be a no-brainer for us on this board who have had no-load mutual fund companies removed (Fidelity and or Vanguard).....At a minimum, lets get them on the vendor list while we try to straighten out all of the madness in an attempt to get Fidelity back. Clearly this is a better option than the other insurance companies. Thanks for reading and any input that you can share.

 

 

The documents are living meaning they can be modified as long as they are IRS compliant.

 

I assume then that your district has no plans to listen to its employees, let alone form a committee. Might make a pitch to the Board of Education about the power of transparency because it is the employees' money.

I reread the other thread and what your business manager said about having loans available as an explanation for Fidelity not to signing on is pretty lame and arrogant. He is taking it upon himself that HE will have to turn down some poor teacher's request for a loan. I see what you are up against. Its not what he said is how he explained it. Meaning, end of conversation.

In the meantime go with the Roth and forget the 403b. Doesn't look good. But I am very happy you are hanging in there and reporting on your progress. Its a learning process for all of us.

2 cents worth,

Steve

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Thanks Steve. You would still recommend abandoning the 403b all together even if 403basp is brought on as a vendor. If they are brought on and the fees are as advertised with no TPA, it Truely is not that far off from Fidelity Direct. Agreed, in that its not AS good but still the benefits of the pre-tax contributions and lowering of your adjusted gross income would outweigh that small difference??????????

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Sull,

The fact that you are all over this process means that 403basp might be OK with their fee structure. The standard rule of thumb is that if the fees are 1.5% or more, the tax deferred benefit is moot (standard internet lore for years). If anybody can calculate an exact figure, I am all ears. Too many ifs, what if tax rates are higher or lower in the future, that would change the tipping point.

Steve

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I am a skeptic by nature regarding investing vehciles wihtin districts as well. And I have done as much research as I think that I can trying to fully unveil the fees associated with 403basp. I have posted some supporting evidence below... I hope the authors dont mind but feel that it may be useful for other people reading................. The second email is a response from Dan Otter. I am compelled to think after my own extensive research and the input from reputable sources here, that the info is valid from 403basp..... However, again, any input from anyone who has experience with this company would be the most valuable which I havent been able to do yet.

THANKS

 

 

 

Hi Kevin,

 

I'll do my best to answer your questions. 403basp is different than most other vendors in the sense that they are not a mutual provider or insurance company. Thus, they are not a product provider and don't have the conflicts these companies have (or lack of transparency). They are an independent third-party administrator (TPA) and recordkeeper, but in a real sense, they are a technology platform. Because they are a technology platform, they have found a unique niche in the 403b world (especially w/ school districts) because there are so many different provider options made available to participants. They have been able to bridge together these disparate providers which is helping school districts simplify the management process. The 403b world is changing with regard to fiduciary responsibility, oversight and regulations. If you follow this link and click on the drop-down box you'll see the New Jersey school districts who they are working with: http://403bplan.info/newjersey.html

 

The 403basp costs you outlined are accurate from a participant standpoint (not including fund costs). You don't need to be skeptical about additional hidden fees - they are accurate. One of the nice things about 403basp is that they are totally transparent. There are also usually costs associated with the school district from an administration standpoint but these should be paid directly by the district. 403basp would have to address what these fees would be.

 

Based on your example below, you would pay the following:

 

$40 account fee

0.10% ###### $20,000 = $20

$5,000 ###### 0.32% (VQNPX expense ratio) = $16

$5,000 ###### 0.40% (VDAIX expense ratio) = $20

$5,000 ###### 0.82% (RNGEX expense ratio) = $41

$5,000 ###### 0.63% (RLBEX expense ratio) = $31.5

 

Total $ = $168.50

Total Weighted % = 0.84%

 

 

My best recommendation for doing additional research would be to call 403basp and ask them about any questions you have. Let me know if this helps.

 

Than(k)s,

 

Joshua P. Itzoe, CFP®, AIF® 

_________________________________________________________________________________________

After receiving your email, I contacted my good friend, co-author of my first book, and planner, Scott Dauenhauer CFP recently met with 403basp's owner James Olson and has the following to say about this company:

 

In terms of their pricing, yes, it is .10% and $40. They also make money if the participants end up choosing funds that have revenue sharing (assuming no advisor is connected to that participant and receiving it). For someone who is investing in non-revenue sharing funds such as Vanguard then the only compensation 403bASP receives is the .10% and $40.As for Fidelity not doing loans (neither does Vanguard) and ASP doing loans for people invested in Fidelity or Vanguard: 403bASP is simply a recordkeeper for mutual funds, they have built the technology to allow them to do loans. Fidelity does do loans and has the ability and technology to do so (as does Vanguard), but is very selective as to when and what plans they make that option available too. It gets complicated, but Fidelity is not the account provider, ASP is the account provider and it doesn't matter what funds are held through ASP, they have the will and capability to do loans with their technology. I am not sure if they charge an extra fee for a loan, I'm assuming they do (and they should), you should find this out.In regards to the IPS, I see no reason why they couldn't comply. They've built a technology platform that is more flexible than anything I've seen in the business and are able to accommodate requests that many of the largest recordkeepers would laugh at. While I'm sure they'd review your IPS, they are receiving requests from hundreds of school districts a month and are pretty busy (they just hired 18 more people to keep up with the demand).I've visited ASP myself and am comfortable with them. Remember, they are the recordkeeper, the money is actually held at a Trust company (who are highly regulated). The trust company is Matrix.While I think they are a good company, I encourage you to do your own due diligence and not rely on the word of someone else (regardless of credibility).I hope this helps.Scott Dauenhauer

 

 

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403bASP is not ready for primetime. Over the past several weeks, I have left three voice messages for them, and sent one email, asking for additional information about my plan's investment options (which are not listed on their website). I have received one phone message back, asking me to please call them at their 800 number. Oh gee, I think I already tried that. Sure, they might be a good option, but not when I can't even get in touch with a representative. Has anybody had success contacting them using an alternate means?

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I got a response in a couple of days by writing my questions to info@403bASP.com and have had an ongoing conversation back and forth by 6 emails since late December.

That compares very favorably with zero responses from CPI, which has the contract to be my district's TPA, in spite of multiple phone messages and emails.

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elgordo,

 

Thansk for your experience, I think you are the only one on here that is an active participant in this vendor, is this safe to say>? When our vendor list changes about 3 weeks ago, I reached out to all existing and new vendors and the response time was pathetic to non-existent. What a mess. If I can just determing how funds are slected for districts under 403basp as provider, and could establish that there will be low cost index funds via Fidelity or Vanguard, I will not need to have the ability to talk to anyone right away. Just "set it and forget it" (aside from rebalancing which is not on my schedule if I choose a simple Vanguard Target Retirement Fund)

 

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elgordo,

 

Thansk for your experience, I think you are the only one on here that is an active participant in this vendor, is this safe to say>? When our vendor list changes about 3 weeks ago, I reached out to all existing and new vendors and the response time was pathetic to non-existent. What a mess. If I can just determing how funds are slected for districts under 403basp as provider, and could establish that there will be low cost index funds via Fidelity or Vanguard, I will not need to have the ability to talk to anyone right away. Just "set it and forget it" (aside from rebalancing which is not on my schedule if I choose a simple Vanguard Target Retirement Fund)

 

What district are you under sullivanke? I may be able to help you out or point you to someone.

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BigRed,

 

Thanks, I am Middletown Board of Ed. Monmouth County, NJ

 

I don't see your district listed anywhere. Go to

 

http://faboss.403b-bridge.com/

 

click on 403b document center

 

select new jersey

 

then look through the list of districts for possiblities, maybe yours is on there under a different name. One I looked at in NJ is just American Funds.

 

Hope that helps.

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