Jump to content
javert

Still Having Trouble Getting Vanguard In....

Recommended Posts

In our school district 403b here in New Jersey, we only have several different Insurance company choices (e.g. AIG, Valic...) I have tried to get them to approve Vanguard, and here is the scenario so far.

 

The business administrator does not respond to my emails or phone calls about this. I saw him walking around my buislding during an in-service in November, and he told me I need to present him with 20 employees who willd efinitely sign up before they can get them in. I did not feel comfortable trying to get others to sign up for anything, so i got our union president to find out where does it say we need this "20 persons to sign up"; otherwise let's get Vanguard approved. She had the same problem having this guy respond...now he says that the reason they can't get Vnaguard in is because they are not listed as "approved" by NJEA.

 

Does this make sense to anyone? I feel like this business administrator is somehow protecting the salespeople for these other companies. Our local union presidnet is now pursuing this with NJEA.

 

ANy thoughts at all? I am very frustrated...ready to go to the next board meeting and explode at this guy.

Share this post


Link to post
Share on other sites

It's hard to say what the issue may be with your business administrator but I can tell you that Vanguard has been difficult to obtain for a lot of people. Only in rare instances have they reportedly signed anything other than their own information sharing agreement so if your employer uses a TPA or has its own ISA, you might be out of luck.

 

To the best of my knowledge, Vanguard does not have a 20-person minimum so it might be something your employer wanted in order to make it worth their time to set up. More vendors in a 403b plan means more sources of data to track and coordinate. Of course it can be done, they just might not want to do it for any number of reasons - valid or otherwise.

 

Perhaps your union will have some sway but don't hold your breath. At the very least, you deserve a credible response instead of playing the shifting answers game.

 

 

Barney

 

 

 

In our school district 403b here in New Jersey, we only have several different Insurance company choices (e.g. AIG, Valic...) I have tried to get them to approve Vanguard, and here is the scenario so far.

 

The business administrator does not respond to my emails or phone calls about this. I saw him walking around my buislding during an in-service in November, and he told me I need to present him with 20 employees who willd efinitely sign up before they can get them in. I did not feel comfortable trying to get others to sign up for anything, so i got our union president to find out where does it say we need this "20 persons to sign up"; otherwise let's get Vanguard approved. She had the same problem having this guy respond...now he says that the reason they can't get Vnaguard in is because they are not listed as "approved" by NJEA.

 

Does this make sense to anyone? I feel like this business administrator is somehow protecting the salespeople for these other companies. Our local union presidnet is now pursuing this with NJEA.

 

ANy thoughts at all? I am very frustrated...ready to go to the next board meeting and explode at this guy.

 

 

Share this post


Link to post
Share on other sites

javert,

At this point, go to the board and speak. Before you go, write a letter expressing that having a low cost company such as Vanguard will eventually put more money in employees' pockets.

Below is a spreadsheet that I can email you if you are interested because the data here has no spaces. It shows the difference between VG .20% vs TC .65%, hardly a large difference but after 30 years, this seemingly minute difference is staggering.

Hope this helps,

Steve

 

 

Fund gross return 7.%

Vanguard ER 0.20%

TIAA-CREF ER 0.65%

Annual contributions $16,500

 

Year TIAA Balance Vanguard Balance Difference Difference as %

1 $17,548 $17,622 $74 0.42%

2 $36,210 $36,442 $233 0.64%

3 $56,057 $56,542 $486 0.87%

4 $77,164 $78,009 $845 1.10%

5 $99,612 $100,936 $1,324 1.33%

6 $123,485 $125,422 $1,937 1.57%

7 $148,874 $151,572 $2,698 1.81%

8 $175,875 $179,501 $3,626 2.06%

9 $204,591 $209,329 $4,738 2.32%

10 $235,130 $241,186 $6,055 2.58%

11 $267,609 $275,208 $7,599 2.84%

12 $302,150 $311,544 $9,394 3.11%

13 $338,884 $350,351 $11,467 3.38%

14 $377,951 $391,797 $13,846 3.66%

15 $419,499 $436,061 $16,563 3.95%

16 $463,685 $483,336 $19,651 4.24%

17 $510,676 $533,824 $23,148 4.53%

18 $560,652 $587,747 $27,095 4.83%

19 $613,801 $645,335 $31,534 5.14%

20 $670,325 $706,840 $36,515 5.45%

21 $730,439 $772,527 $42,089 5.76%

22 $794,369 $842,681 $48,312 6.08%

23 $862,359 $917,605 $55,246 6.41%

24 $934,667 $997,625 $62,957 6.74%

25 $1,011,566 $1,083,085 $71,519 7.07%

26 $1,093,348 $1,174,357 $81,008 7.41%

27 $1,180,324 $1,271,835 $91,511 7.75%

28 $1,272,822 $1,375,942 $103,120 8.10%

29 $1,371,194 $1,487,128 $115,934 8.45%

30 $1,475,813 $1,605,875 $130,062 8.81%

 

Share this post


Link to post
Share on other sites

Hi,

I changed the figures to compare the expense ratios between an annuity and Vanguard. As you can see the difference is indeed staggering.

If anybody wants this spreadsheet, PM me.

Have a great day,

Steve

 

 

Fund gross return 6.%

Vanguard ER 0.20%

Annuity 2.25%

Annual contributions $16,500

 

Year Annuity Vanguard Balance Difference Difference as %

1 $17,119 $17,457 $338 1.98%

2 $34,879 $35,927 $1,047 3.00%

3 $53,306 $55,467 $2,161 4.05%

4 $72,424 $76,141 $3,717 5.13%

5 $92,259 $98,015 $5,756 6.24%

6 $112,837 $121,156 $8,319 7.37%

7 $134,187 $145,640 $11,453 8.54%

8 $156,338 $171,545 $15,207 9.73%

9 $179,319 $198,951 $19,632 10.95%

10 $203,163 $227,947 $24,785 12.20%

11 $227,900 $258,625 $30,725 13.48%

12 $253,565 $291,083 $37,518 14.80%

13 $280,192 $325,422 $45,230 16.14%

14 $307,818 $361,754 $53,936 17.52%

15 $336,480 $400,193 $63,712 18.93%

16 $366,217 $440,861 $74,644 20.38%

17 $397,069 $483,888 $86,819 21.86%

18 $429,078 $529,410 $100,332 23.38%

19 $462,287 $577,573 $115,286 24.94%

20 $496,741 $628,529 $131,788 26.53%

21 $532,488 $682,441 $149,953 28.16%

22 $569,575 $739,479 $169,904 29.83%

23 $608,053 $799,826 $191,773 31.54%

24 $647,974 $863,673 $215,700 33.29%

25 $689,391 $931,223 $241,832 35.08%

26 $732,362 $1,002,691 $270,329 36.91%

27 $776,945 $1,078,304 $301,360 38.79%

28 $823,199 $1,158,303 $335,104 40.71%

29 $871,187 $1,242,941 $371,754 42.67%

30 $920,976 $1,332,489 $411,513 44.68%

 

Share this post


Link to post
Share on other sites

My district is in Pennsylvania and we finally got Vanguard approved. There is a $10 per year fee. It's unclear whether teacher pressure had any effect since our business administrator rarely responds to e-mails and more or less said not to ask him if you had any questions about this.

I'm afraid that since Vanguard never sends any representatives in to meet with teachers that many teachers in my district don't realize how this is so much of a better deal than the other choices out there.

 

On another note we are allowed to change the amount of our contributions only once per year. Is this standard in other districts?

Share this post


Link to post
Share on other sites

Dave, do you know the details of your plan document that allowed you to get vanguard added to your list?

 

I recently was told that the IRS states that it is possible to have vendors on the list who both offer loans/hardships and vendors who do not......all under the same plan document?

 

THANKS>

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...