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Roger44

No No-load Low-fee Vendor Option Pt Iii

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I’m starting a new post since the last one started to go in a little different direction. I’ve been encouraged in my postings, so here goes -

 

Tony and Barney suggested a 457b option. I read 457bwise and looked for an Oregon (my locale) 457b plan. Well what do you know – Oregon Savings and Growth Plan (OSGP).

 

http://www.oregon.gov/PERS/OSGP/index.shtml

 

Never heard of it before now. I looked at the funds and fees and they look good. Any comments on this? Anybody familiar with OSGP? Anyone care to look? Relevant info here -

 

http://www.oregon.gov/PERS/OSGP/docs/fee_structure.pdf

and here

http://www.oregon.gov/PERS/OSGP/docs/investment_booklet.pdf

 

But it needs to be set up by the employer. I have not asked my district if it is available but I have a strong feeling he would have mentioned it by now if they did. I will ask. It looks to me like if they were willing to bring this in that it could be a solution.

 

I also will ask for The Plan.

 

I took more advice and looked for local districts and found two neighbor districts (one of which is the biggest around) that offer OSGP through a 457b.

 

I also called some districts in Oregon. One very prominent district directed me to the site of their TPA – Carruth Compliance Consulting. It is also located in Oregon. They have a website that educates employees (really!) and posts all their clients’ (districts) plans and each one’s vendor options. Virtually all the districts offered either Vanguard, Fidelity, T Rowe Price, TIAA CREF or a OSGP 457b. The majority had either Vanguard or Fidelity. What a TPA! Here is a link to the district list on their site.

 

http://www.ncompliance.com/guests.aspx

 

I plan to share this with my district. Thanks for responses!

 

-Roger

 

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The fees look reasonable enough. The 457 plan I believe is not included in the new 403b regulations so it would be easy to add if your employer would be willing to do so. Our Virginia 457B plan is also good with low fees but there seems to be reluctance to add it even though I have brought it to the attention of my business office.

 

Good work on your research!!

 

 

Tony

 

 

Your colleagues should be appreciative of your efforts on their behalf. Sometimes the best way to get change is to tell the folks who work in the school board office that this change would benefit them too!!!

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Roger,

Great job!

I get concerned when I do not complete comprehend the fee structure: For example:http://www.oregon.gov/PERS/OSGP/docs/fee_structure.pdf?ga=t

What does "weighted average" mean?

At the bottom paragraph, the industry's sacred cow, revenue sharing is mentioned.

When you get the plan document, they should give you an example of the total fees that are actually paid by the participant. Always look for that. When presentations are made, the presenter almost always mentions the fees in pieces, such as "mutual fund fee are the lowest in the industrty" or the "TPA only charges 22 basis points." If the presenter evades your questions because "fees are not that important to know" or "can't tell you the fees because it varies from individual to individual", don't participate until you know the fees! Thats pretty simple request.

Keep up your research and come back and tell us what they say.

Steve

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Roger,

 

If I were you, I would definitely continue to investigate the 457/OGSP option. It looks like it may be a good alternative to your 403b and the fees appear reasonable. The state will have its own TPA so the impact on your district is likely minor - just sending payroll and participant data each pay period.

 

Carruth is a rather expensive TPA from what I remember but they do work with almost any vendor. After seeing their prices, I was astonished to see how large their Oregon client list is.

 

-Barney

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