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sschullo

Cost Of 403b Tpas Is "unresolved"

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Brace yourselves teachers:

"these services do come at a cost, and the issue of which party or parties pay for TPA fees is unresolved. Long term, these fees may also increase, as the true cost of providing administrative services for 403(b) plans becomes apparent."

 

http://asbointl.org/ASBO/files/ccLibraryFiles/Filename/000000003115/LIMRA_ASBO_2009.pdf

 

Excellant website: http://asbointl.org/index.asp?bid=9709

For example, this page http://asbointl.org/index.asp?bid=25820 reveals the influence from ING, AXA, Metlife, VALIC (formerly AIG Retirement) and other insurance industry mucky mucks on ASBO council.NOT ONE TEACHER! One just wonders if anybody on this council has any of the insurance products that are and will be sold to our teacher colleagues on their very own retirement plans.

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Hello,

 

In response to your last sentence I had to resend my post from the summer of 2008. Sorry to re-post, but it seemed appropriate, especially after the AIG debacle:

 

Below you will see a post from the summer that many of you may have missed. It points out that AIG-Valic does indeed know what is best for retirement savings. I thought that after the events of the last few days it deserves a repeat posting.

 

 

This spring my wife's school district and my school district have taken alternate paths in working with the new IRS regulations. My school district chose a CPA firm to assist us. The firm really seems to understand that the spirit of the new regs is to modernize the 403b and make it more transparent. My wife's school district, on the other hand, chose as consultant a firm that seems most focused on promoting the insurance industry at the detriment of teachers' retirement savings.

 

Previously my wife had Vanguard as an option, but after the consultant's advising, they were left with just ING and AIG-VALIC. The consultant refused to pursue Vanguard or Fidelity. After this shady deal was struck, there was a meeting for all employees who weren't previously with VALIC or ING. The purpose of the meeting was to explain the IRS changes and give the VALIC and ING time to sell their products.

 

After the business manager gave an introduction, I asked if I could say something and ask a question. I proceeded to read a page and a half prepared statement aggressively bringing light on the past practices of the two companies and the amount of money people lose by going with annuities. (Thanks to 403bwise for a lot of my information). When I finished, the crowd cheered and the tone for the night was set.

 

Next the representative from VALIC spoke and rolled out their high-fee annuities and their new mutual fund platform, or as I like to say, the bait and switch. I am sure no one will be encouraged to take this option. Of course in true VALIC fashion, she could not produce a list of fees, but promised it would be available later. (So they were chosen to be one of the two options, even though they hadn't shown a fee schedule. Typical). My wife, another audience member and I continued to hammer her with questions and she became more and more agitated. Finally, she said, "You people just don't get it. You have had 15 options for all these years. If you were in business and had a 401k, you would only have one option. You still have two good options. At VALIC, all we have is one option. We only have Vanguard..." I have never seen someone want to take back what she had said more than she did at that moment. What a smoking gun! It was as if the sky opened up and light was finally coming through years of darkness. My wife then asked why VALIC employees could have a true low-cost option, but she couldn't.

 

The ING guy was next and had to completely change his presentation, because after what he had just witnessed, his new platform 1.35% "all-in" (which I'm sure is a huge improvement) wouldn't have been such a great sell with us in the audience.

 

So maybe school systems should follow the first good advice that VALIC has ever given (albeit indirectly) and make a low-cost option available to employees.

 

 

 

 

 

 

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Hello,

 

In response to your last sentence I had to resend my post from the summer of 2008. Sorry to re-post, but it seemed appropriate, especially after the AIG debacle:

 

Below you will see a post from the summer that many of you may have missed. It points out that AIG-Valic does indeed know what is best for retirement savings. I thought that after the events of the last few days it deserves a repeat posting.

 

 

My wife, another audience member and I continued to hammer her with questions and she became more and more agitated.

 

Finally, she (VALIC REP) said, "You people just don't get it. You have had 15 options for all these years. If you were in business and had a 401k, you would only have one option. You still have two good options. At VALIC, all we have is one option. We only have Vanguard..."

 

I have never seen someone want to take back what she had said more than she did at that moment.

 

What a smoking gun! It was as if the sky opened up and light was finally coming through years of darkness. My wife then asked why VALIC employees could have a true low-cost option, but she couldn't.

 

 

 

jbs,

Welcome back and what a GREAT story! I forgot that AIG/VALIC have Vanguard. I applaud you and your wife for your courage. The above quote should be posted all over the web. I and many teachers dream of our school districts having the same option as the employees of VALIC, with publicity and education.

Have a great weekend,

Steve

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