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Roger44

No No-load Low-fee Vendor Option

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Hello, I’m new here and I would like to say thanks for the huge amount that I have learned from this site.

 

I recently decided to begin a 403b and set about educating myself. I am in a medium-small district that offers five vendors – three annuity, and two with access to mutual funds - First Investors and Oppenheimer. First Investors rates look outrageous. The better choice appears to be Oppenheimer. I’ve looked through their prospectuses and they appear to be high-ish front-end loads with high-ish fees. Could I get an appraisal?

 

I have contacted my district CFO and she has stated that adding another vendor is an “employee-driven process”. The district has planwithease (owned by ING) as TPA. I plan to organize and lobby the district to add a no-load option (Vanguard, Fidelity, T Rose Price) or TIAA-CREF. I’m not looking for a fight, I just want a decent option. Advice on how to proceed? Thanks in advance.

 

-Roger

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Welcome to the site!!

 

My first comment is that my initial impression is that you have NO good options. Oppenheimer is a terrible choice. Their target retirement funds are very low rated and have underperformed and have been risky. Their other funds are expensive. ING has been a negative with me because of high fees but they run our state 457 plan ( which my district won't sign on too even though its better than the 403b plan we have) and surprisingly its a good plan with many low cost options. So see if the ING TPA can hook you up with some low cost fund options. Remember though that the TPA charges a fee too beyond the expense ratio of the fund.

 

I would definitely petition your personnel director. Insist that every plan deserves at least one low cost option complete with index funds. Recruit others to also ask for a better option. A sheet with names might do the trick.

 

Vanguard may not happen because of legal agreement issues. Fidelity would bean awesome choice because they have the Spartan Funds which are the cheapest in the industry. TIAA CREF and TROWE Price would also be good choices.

 

Remember, when investing you don't get what you pay for. Paying more eats away your money and often does not give you better returns.

 

Please don't be reluctant to ask questions as you need answers!! That we we are here.

 

Tony

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Hello, I’m new here and I would like to say thanks for the huge amount that I have learned from this site.

 

I recently decided to begin a 403b and set about educating myself. I am in a medium-small district that offers five vendors – three annuity, and two with access to mutual funds - First Investors and Oppenheimer. First Investors rates look outrageous. The better choice appears to be Oppenheimer. I’ve looked through their prospectuses and they appear to be high-ish front-end loads with high-ish fees. Could I get an appraisal?

 

I have contacted my district CFO and she has stated that adding another vendor is an “employee-driven process”. The district has planwithease (owned by ING) as TPA. I plan to organize and lobby the district to add a no-load option (Vanguard, Fidelity, T Rose Price) or TIAA-CREF. I’m not looking for a fight, I just want a decent option. Advice on how to proceed? Thanks in advance.

 

-Roger

 

Hi Roger,

Welcome. Tony is right, you do not have low cost options. AVOID THEM!

When your CFO said that "adding another vendor is an employee-driven process", then go for it. However, to be effective, you need to find our what exactly does she mean by "employee-driven process." Before you go out an get other employees, here are my suggestions:

 

1. Find out what employee driven process means.

2. Write a simple letter to the board of education indicating what you want to do. Would not hurt to insert a graph showing how low costs greatly add to employees final nestegg.

3. If you have a union, call the president or his or her rep and talk to them.

4. Get the plan document from planwithease.

5. Speak to the board of education during their 3 minute public comments.

6. If your union has a retirement committee, start attending their meetings and talk with people.

7. Use the search feature on this website. This issue has been discussed at length in the past. For example:

http://bwise.ibforums.com/index.php?showto...l=how+to+change

 

When you get more information, come back and let us know what happened.

 

Good luck,

Steve

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Hello, I’m new here and I would like to say thanks for the huge amount that I have learned from this site.

 

I recently decided to begin a 403b and set about educating myself. I am in a medium-small district that offers five vendors – three annuity, and two with access to mutual funds - First Investors and Oppenheimer. First Investors rates look outrageous. The better choice appears to be Oppenheimer. I’ve looked through their prospectuses and they appear to be high-ish front-end loads with high-ish fees. Could I get an appraisal?

 

I have contacted my district CFO and she has stated that adding another vendor is an “employee-driven process”. The district has planwithease (owned by ING) as TPA. I plan to organize and lobby the district to add a no-load option (Vanguard, Fidelity, T Rose Price) or TIAA-CREF. I’m not looking for a fight, I just want a decent option. Advice on how to proceed? Thanks in advance.

 

-Roger

 

 

First thing you need to do is to contact the business office and TPA to find out what are the criteria for adding investment options. From what you describe it appears that the SD is not picking up any of the expenses of the plan which is why you have 3 annuity carriers and expensive mutual funds because the fees from the investment products are used to pay for the cost of plan administration and operation. The low cost providers that you are interested in may not be interested in your SD because the sales volume will be too small to justify the admin expeses they will incur. TIAA-CREF and VG have displayed little interest in adding new SDs with voluntary 403b plans. Also the TPA will object to adding low cost providers unless there is a way for the plan to collect the fees necessary to pay for the plan expenses from these providers or the employees who select these investments which will eliminate any advantages of their low fees.

 

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Hi Roger,

As you can see by the last poster, be prepared to hear similar discouraging comments when you talk with your district and TPA. Never get discouraged, especially by 403b professionals. Here is a fact FYI: TIAA CREF is a choice on our districts list, which has one of the most restrictive policies known to the 403b world. And if you are in California Pension2 is available. Both are low cost and commission free and are rated highly from us ordinary investors on this site.

Lets us know what you find out,

Steve

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Hi Roger,

As you can see by the last poster, be prepared to hear similar discouraging comments when you talk with your district and TPA. Never get discouraged, especially by 403b professionals. Here is a fact FYI: TIAA CREF is a choice on our districts list, which has one of the most restrictive policies known to the 403b world. And if you are in California Pension2 is available. Both are low cost and commission free and are rated highly from us ordinary investors on this site.

Lets us know what you find out,

Steve

 

 

Steve:

 

How many employees are there in your SD? Maybe 45,000 teachers and 38,000 staff employees at salaries over $100k which provide a lot more sales opportunities than availablle in his SD. Also how restrictive is your SD plan if it includes Oppenheimer among its 17 vendors.

 

I am not discouraging him. He needs to understand the market forces that are involved here. I dont know any SD that have funds to spare fora 403b plans.

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Not discouraging! This is not exactly positive or new when you wrote:

 

"The low cost providers that you are interested in may not be interested in your SD because the sales volume will be too small to justify the admin expeses they will incur. TIAA-CREF and VG have displayed little interest in adding new SDs with voluntary 403b plans."

 

Tell me why he needs to understand market forces. Market forces have little to do with 403b plans as much as politics, regulations and age old policies that keep both district and teachers ignorant.

 

You have no idea how TC has tried to enter the 403b market here in California 8-9 years ago by taking a bold move to change the unchangeable, state insurance code 770.3 and creating 403bcompare.com.

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Not discouraging! This is not exactly positive or new when you wrote:

 

"The low cost providers that you are interested in may not be interested in your SD because the sales volume will be too small to justify the admin expeses they will incur. TIAA-CREF and VG have displayed little interest in adding new SDs with voluntary 403b plans."

 

Tell me why he needs to understand market forces. Market forces have little to do with 403b plans as much as politics, regulations and age old policies that keep both district and teachers ignorant.

 

 

For a PHd you are not very articulate. The second sentence in the second paragraph is a bowlfull of mush of intellectual thought.

 

I merely suggested that Roger needs to understand market forces to make sure his is not wastiing his time as it has been reported on this board that low cost providers such as VG and TC are no longer options under many voluntary SD 403b plans. He should first find out if TC and VG would be interested in becoming an option under his SD's plan and then contact the TPA to find out whether it would be possible to add one or both of them.

 

 

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Intruder,

 

Manners please.

 

 

Tony

 

 

Tony:

 

This website is for teachers who are supposed to know how to write sentences in English. Teachers are role models for students. Would you accept such language from a student or would you correct it?

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Intruder,

 

Manners please.

 

 

Tony

 

 

Asking this poster to mind his, her or its manners is like asking Captain Ahab to give up trying to kill Moby d ick.

 

Roger,

Sorry about the above poster. This happens from time to time. The above poster is a “professional” and all he, she or it wants to do on this site is intimidate and bully us into silence under the cowardly guise of anonymous. This is the kind of BS you might be up against. As anybody can plainly see, his comment about my grammar has nothing to do with your request and it’s a rather simple minded personal attack because I dared question the poster, why you should know about marketing? This “professional” offers an example of what happens when you and I say NO to their services and information.

 

You have to just smile and move on. You mentioned you do not want to fight. Neither do any of us. Heck, we are teachers who care about students. Just be prepared. There is a small revolution going on in the entire financial industry. Investors such as you are wising up to their "services." Some pros will whine and complain while the competent professionals will take on the challenge and thrive.

The webmaster will decide if the above poster's attacks will warrant another warning.

 

Have a great day,

Steve

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I have contacted my district CFO and she has stated that adding another vendor is an “employee-driven process”. The district has planwithease (owned by ING) as TPA. I plan to organize and lobby the district to add a no-load option (Vanguard, Fidelity, T Rose Price) or TIAA-CREF. I’m not looking for a fight, I just want a decent option. Advice on how to proceed? Thanks in advance.

 

-Roger

 

 

TPA's usually only work with vendors willing to sign their agreements. Ask your CFO for a copy of the planwithease vendor list or to request a copy from planwithease. Your options will be limited to to the vendors on the list.

 

Last I saw, the planwithease vendor list did not include Vanguard, Fidelity, or TRP but they did have TIAA-CREF.

 

I would also ask the CFO what "employee-driven process" really means. It might be as simple as requesting a new vendor be added (one that's already on the TPA's list that is).

 

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I have contacted my district CFO and she has stated that adding another vendor is an “employee-driven process”. The district has planwithease (owned by ING) as TPA. I plan to organize and lobby the district to add a no-load option (Vanguard, Fidelity, T Rose Price) or TIAA-CREF. I’m not looking for a fight, I just want a decent option. Advice on how to proceed? Thanks in advance.

 

-Roger

 

 

I would also ask the CFO what "employee-driven process" really means. It might be as simple as requesting a new vendor be added (one that's already on the TPA's list that is).

 

 

Exactly!!!!

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Intruder,

 

I may not be the one to do any correcting of others. My typing skills are horrendous and I'm sure my grammar is not always correct either. I just think you make a terrible impression on others with your

uncouth remarks. WE are here to learn and share not demean.

 

 

 

 

Intruder,

 

Manners please.

 

 

Tony

 

 

Tony:

 

This website is for teachers who are supposed to know how to write sentences in English. Teachers are role models for students. Would you accept such language from a student or would you correct it?

 

 

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Thanks to all those who responded with helpful advice. I will follow it and report the results.

 

Despite the fact that the powers that be may conspire to force me to pay fees for unwanted services, I am going to do my best to avoid it. If that fails, I will loudly complain. I certainly don't plan to just give up.

 

Nobody on here should allow insurance agents to wind them up. They are, after all, insurance agents (see attached link).

 

 

 

-Roger

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