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Switching To Calstrs Pension2

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After reading the Forum and all the raves for Pension2 through CALSTRS, I am thinking of switching my 403B from Nationwide Insurance to Pension2 for the sole reason of reducing fees.

 

I am currently paying a little over 1% (to the best of my ability to figure it) on my monthly contributions to Vanguard's Wellington Fund (balanced fund) which is administrated through the San Diego County Office of Education as it's provider with Nationwide as the conduit. (We can no longer buy direct from Vanguard.) I have been very happy with the fund, which is yielding around 12% annually.

 

I found the Pension2 offerings, and they list the fees. My question is this: If I "build" a portfolio, or choose one of the retirement easy choice options, how do I figure the fees? If the fee on one fund is, say, .40% and the fee on another fund is .39% and I put both funds into my portfolio, am I essentially paying .79 in fees?

 

This may be a dumb question to most of you, and I apologize. I'm pretty good at knowing what funds/mixes I want, but not sure how to figure out if I'll actually do better fee-wise with Pension2. Can somebody explain this to me?

 

I'm looking at either a balanced fund or the easy choice portfolio for retirement in 2020.

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If memory serves, TIAA-CREF (who runs the Pension 2 accounts for Calstrs) charges a .33 percent annual fee on any funds in Pension 2, with the exception of TIAA-CREF funds (or their guaranteed annuity contract). That fee is in addition to the underlying fund expense ratios. The good news is that many of the offered funds have extremely low expenses. For example, Vanguard Total Stock Market institutional funds charge just .06% annual expenses. So, your total expenses for the percentage of your money invested in that fund would be .39% Other available funds may charge higher expense ratios--your effective cost will be determined by the mix of funds you choose. Most 403b plans charge something more than a standard IRA account (presumably this is due to extra record-keeping requirements), so the Pension 2 offerings end up among the least expensive available, and they offer some excellent fund choices, including a few DFA funds, which many find highly desirable.

 

I have my 403b in Pension2 and a small 457b in Nationwide (my district doesn't offer a Calstrs 457 account). If I'm remembering correctly, Nationwide tacks something like .69% on to the lower-fee funds they offer (which themselves are not the low-cost institutional variety), plus many of their offerings are high-fee managed funds. No question, Pension 2 is the superior option.

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After reading the Forum and all the raves for Pension2 through CALSTRS, I am thinking of switching my 403B from Nationwide Insurance to Pension2 for the sole reason of reducing fees.

 

I am currently paying a little over 1% (to the best of my ability to figure it) on my monthly contributions to Vanguard's Wellington Fund (balanced fund) which is administrated through the San Diego County Office of Education as it's provider with Nationwide as the conduit. (We can no longer buy direct from Vanguard.) I have been very happy with the fund, which is yielding around 12% annually.

 

I found the Pension2 offerings, and they list the fees. My question is this: If I "build" a portfolio, or choose one of the retirement easy choice options, how do I figure the fees? If the fee on one fund is, say, .40% and the fee on another fund is .39% and I put both funds into my portfolio, am I essentially paying .79 in fees?

 

This may be a dumb question to most of you, and I apologize. I'm pretty good at knowing what funds/mixes I want, but not sure how to figure out if I'll actually do better fee-wise with Pension2. Can somebody explain this to me?

 

I'm looking at either a balanced fund or the easy choice portfolio for retirement in 2020.

 

 

Under that scenario you would take a weighted-average. For example, if you put 50% into both of those funds you would arrive at your weighted-average fee by the following calculation (50% * .39)+(50% * .40%). The answer is your weighted-average cost is .395% annually.

 

ScottyD

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After reading the Forum and all the raves for Pension2 through CALSTRS, I am thinking of switching my 403B from Nationwide Insurance to Pension2 for the sole reason of reducing fees.

 

I am currently paying a little over 1% (to the best of my ability to figure it) on my monthly contributions to Vanguard's Wellington Fund (balanced fund) which is administrated through the San Diego County Office of Education as it's provider with Nationwide as the conduit. (We can no longer buy direct from Vanguard.) I have been very happy with the fund, which is yielding around 12% annually.

 

I found the Pension2 offerings, and they list the fees. My question is this: If I "build" a portfolio, or choose one of the retirement easy choice options, how do I figure the fees? If the fee on one fund is, say, .40% and the fee on another fund is .39% and I put both funds into my portfolio, am I essentially paying .79 in fees?

 

This may be a dumb question to most of you, and I apologize. I'm pretty good at knowing what funds/mixes I want, but not sure how to figure out if I'll actually do better fee-wise with Pension2. Can somebody explain this to me?

 

I'm looking at either a balanced fund or the easy choice portfolio for retirement in 2020.

 

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I too have Pension2. When I was looking for a 403b provider after Vanguard was not part of my district anymore, I did research on all the possible vendors offered for my district. Pension2 was the most cost-efficient while offering a wide range of mutual funds that meets my need (and I'm sure others too). Glad you are with Pension2 now. The information they provide you when you log in is easy to read and understand. I wish they would show your actual yearly net return instead of you trying to figure it out yourself. I'm also hoping for more funds to be added.

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I am thinking of switching to the Calstrs pension2 conservative 2020 plan, but am having hard time trying to figure out last years yearly net return. Can anyone offer this info from there own statement just so I have some kind of idea of the performance.

Thanks

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Guest Joel L. Frank

I too have Pension2. When I was looking for a 403b provider after Vanguard was not part of my district anymore, I did research on all the possible vendors offered for my district. Pension2 was the most cost-efficient while offering a wide range of mutual funds that meets my need (and I'm sure others too). Glad you are with Pension2 now. The information they provide you when you log in is easy to read and understand. I wish they would show your actual yearly net return instead of you trying to figure it out yourself. I'm also hoping for more funds to be added.

 

 

Your annual net return is not the easiest thing to compute because of all the purchases you make during the year---but it definitely is doable.

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Guest Joel L. Frank

I too have Pension2. When I was looking for a 403b provider after Vanguard was not part of my district anymore, I did research on all the possible vendors offered for my district. Pension2 was the most cost-efficient while offering a wide range of mutual funds that meets my need (and I'm sure others too). Glad you are with Pension2 now. The information they provide you when you log in is easy to read and understand. I wish they would show your actual yearly net return instead of you trying to figure it out yourself. I'm also hoping for more funds to be added.

 

 

Your annual net return is not the easiest thing to compute because of all the purchases you make during the year---but it definitely is doable.

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I am thinking of switching to the Calstrs pension2 conservative 2020 plan, but am having hard time trying to figure out last years yearly net return. Can anyone offer this info from there own statement just so I have some kind of idea of the performance.

Thanks

 

 

Hi Scott,

Welcome. Since TIAA CREF is the administrator, you might call them.

Here is something to ponder in the meantime. What if the return was terrific on one hand or it lost money on the other? What would you decide in each case? I hope you don't decide based on last years returns.

My point: Returns are not the reason we choose a plan. We choose plans because we want some exposure to risk via equities so we can outperform bonds to keep up with inflation, some protection with bonds for rebalancing to keep our gains, and fully diversified with bonds and equities as broadly as possible with all stocks from around the world and all bonds within the United States to manage and spread out the risk. We want to reduce risk, interestingly, returns are increased over time when risk is reduced through diversification. The return is not considered in this choice to choose or not choose a fund. Last year's return darlings become tomorrow's dogs and it can happen quickly.

 

http://enroll.tiaa-cref.org/Resources/CustomFiles/calstrs_easy_choice_ports.pdf

The 2020 fund is for somebody who is retiring around 8 years. It has a 29% equity and 71% fixed (bonds). I think it's a great choice because you have all of the bases covered with a broadly diversified portfolio including inflation protection and TIAA CREFs traditional annuity. I think it's a good choice for somebody close to retirement.

 

I am going to be 65 in a few months and I have a similar portfolio with 30% in stocks and 70% in bonds. My portfolio earned 2.6% last year, but over the last three years it earned an average annual return of 9.2%. I am happy since it recovered from a 11.9% loss in 2008.

 

If you have any more questions, we are here to help.

 

Have a great day,

Steve

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I am thinking of switching to the Calstrs pension2 conservative 2020 plan, but am having hard time trying to figure out last years yearly net return. Can anyone offer this info from there own statement just so I have some kind of idea of the performance.

Thanks

 

 

Hi Scott,

Welcome. Since TIAA CREF is the administrator, you might call them.

Here is something to ponder in the meantime. What if the return was terrific on one hand or it lost money on the other? What would you decide in each case? I hope you don't decide based on last years returns.

My point: Returns are not the reason we choose a plan. We choose plans because we want some exposure to risk via equities so we can outperform bonds to keep up with inflation, some protection with bonds for rebalancing to keep our gains, and fully diversified with bonds and equities as broadly as possible with all stocks from around the world and all bonds within the United States to manage and spread out the risk. We want to reduce risk, interestingly, returns are increased over time when risk is reduced through diversification. The return is not considered in this choice to choose or not choose a fund. Last year's return darlings become tomorrow's dogs and it can happen quickly.

 

http://enroll.tiaa-cref.org/Resources/CustomFiles/calstrs_easy_choice_ports.pdf

The 2020 fund is for somebody who is retiring around 8 years. It has a 29% equity and 71% fixed (bonds). I think it's a great choice because you have all of the bases covered with a broadly diversified portfolio including inflation protection and TIAA CREFs traditional annuity. I think it's a good choice for somebody close to retirement.

 

I am going to be 65 in a few months and I have a similar portfolio with 30% in stocks and 70% in bonds. My portfolio earned 2.6% last year, but over the last three years it earned an average annual return of 9.2%. I am happy since it recovered from a 11.9% loss in 2008.

 

If you have any more questions, we are here to help.

 

Have a great day,

Steve

 

 

Thanks Steve,

I did call them and they could not give me any rough figures on the performance of the fund. They said I would have to figure this out and I do not know how.

I just wanted to have some kind of guideline.

Thanks

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I am thinking of switching to the Calstrs pension2 conservative 2020 plan, but am having hard time trying to figure out last years yearly net return. Can anyone offer this info from there own statement just so I have some kind of idea of the performance.

Thanks

 

 

Hi Scott,

Welcome. Since TIAA CREF is the administrator, you might call them.

Here is something to ponder in the meantime. What if the return was terrific on one hand or it lost money on the other? What would you decide in each case? I hope you don't decide based on last years returns.

My point: Returns are not the reason we choose a plan. We choose plans because we want some exposure to risk via equities so we can outperform bonds to keep up with inflation, some protection with bonds for rebalancing to keep our gains, and fully diversified with bonds and equities as broadly as possible with all stocks from around the world and all bonds within the United States to manage and spread out the risk. We want to reduce risk, interestingly, returns are increased over time when risk is reduced through diversification. The return is not considered in this choice to choose or not choose a fund. Last year's return darlings become tomorrow's dogs and it can happen quickly.

 

http://enroll.tiaa-cref.org/Resources/CustomFiles/calstrs_easy_choice_ports.pdf

The 2020 fund is for somebody who is retiring around 8 years. It has a 29% equity and 71% fixed (bonds). I think it's a great choice because you have all of the bases covered with a broadly diversified portfolio including inflation protection and TIAA CREFs traditional annuity. I think it's a good choice for somebody close to retirement.

 

I am going to be 65 in a few months and I have a similar portfolio with 30% in stocks and 70% in bonds. My portfolio earned 2.6% last year, but over the last three years it earned an average annual return of 9.2%. I am happy since it recovered from a 11.9% loss in 2008.

 

If you have any more questions, we are here to help.

 

Have a great day,

Steve

 

 

Thanks Steve,

I did call them and they could not give me any rough figures on the performance of the fund. They said I would have to figure this out and I do not know how.

I just wanted to have some kind of guideline.

Thanks

 

 

Sorry you had trouble finding the information you were looking for. If you go to www.Pension2.com there is a link on the right had side of the page about half way down under "Quick Links" entitled "Quarterly Performance". The PDF document that launches contains performance information for all of the funds available under Pension2, including the Easy Choice Portfolios (page 5). Specific to your question, the Conservative 2020 fund returned 3.14% for calendar year 2011. On the Pension2 site you can also find allocation information for each of the Easy Choice Portfolios, which are set up with particular risk-tolerances and retirement dates in mind. If there is any additional information we can provide, CalSTRS Pension2 program can be reached at 1-888-394-2060.

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I am thinking of switching to the Calstrs pension2 conservative 2020 plan, but am having hard time trying to figure out last years yearly net return. Can anyone offer this info from there own statement just so I have some kind of idea of the performance.

Thanks

 

 

Hi Scott,

Welcome. Since TIAA CREF is the administrator, you might call them.

Here is something to ponder in the meantime. What if the return was terrific on one hand or it lost money on the other? What would you decide in each case? I hope you don't decide based on last years returns.

My point: Returns are not the reason we choose a plan. We choose plans because we want some exposure to risk via equities so we can outperform bonds to keep up with inflation, some protection with bonds for rebalancing to keep our gains, and fully diversified with bonds and equities as broadly as possible with all stocks from around the world and all bonds within the United States to manage and spread out the risk. We want to reduce risk, interestingly, returns are increased over time when risk is reduced through diversification. The return is not considered in this choice to choose or not choose a fund. Last year's return darlings become tomorrow's dogs and it can happen quickly.

 

http://enroll.tiaa-cref.org/Resources/CustomFiles/calstrs_easy_choice_ports.pdf

The 2020 fund is for somebody who is retiring around 8 years. It has a 29% equity and 71% fixed (bonds). I think it's a great choice because you have all of the bases covered with a broadly diversified portfolio including inflation protection and TIAA CREFs traditional annuity. I think it's a good choice for somebody close to retirement.

 

I am going to be 65 in a few months and I have a similar portfolio with 30% in stocks and 70% in bonds. My portfolio earned 2.6% last year, but over the last three years it earned an average annual return of 9.2%. I am happy since it recovered from a 11.9% loss in 2008.

 

If you have any more questions, we are here to help.

 

Have a great day,

Steve

 

 

Thanks Steve,

I did call them and they could not give me any rough figures on the performance of the fund. They said I would have to figure this out and I do not know how.

I just wanted to have some kind of guideline.

Thanks

 

 

Sorry you had trouble finding the information you were looking for. If you go to www.Pension2.com there is a link on the right had side of the page about half way down under "Quick Links" entitled "Quarterly Performance". The PDF document that launches contains performance information for all of the funds available under Pension2, including the Easy Choice Portfolios (page 5). Specific to your question, the Conservative 2020 fund returned 3.14% for calendar year 2011. On the Pension2 site you can also find allocation information for each of the Easy Choice Portfolios, which are set up with particular risk-tolerances and retirement dates in mind. If there is any additional information we can provide, CalSTRS Pension2 program can be reached at 1-888-394-2060.

 

 

Thanks Brian,

It's great that somebody from CalSTRS comes here to answer questions, assuming you are from CalSTRS pension2. The OP wanted the calendar year return for 2011 of that 2020 conservative portfolio. The page 5 reports through Aug 31, 2011 with 3 month, YTD, etc. etc. I am also interested in the calendar year returns of all of these portfolios since inception, from 2007 through 2011.

Thanks in advance,

Steve

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I am thinking of switching to the Calstrs pension2 conservative 2020 plan, but am having hard time trying to figure out last years yearly net return. Can anyone offer this info from there own statement just so I have some kind of idea of the performance.

Thanks

 

 

Hi Scott,

Welcome. Since TIAA CREF is the administrator, you might call them.

Here is something to ponder in the meantime. What if the return was terrific on one hand or it lost money on the other? What would you decide in each case? I hope you don't decide based on last years returns.

My point: Returns are not the reason we choose a plan. We choose plans because we want some exposure to risk via equities so we can outperform bonds to keep up with inflation, some protection with bonds for rebalancing to keep our gains, and fully diversified with bonds and equities as broadly as possible with all stocks from around the world and all bonds within the United States to manage and spread out the risk. We want to reduce risk, interestingly, returns are increased over time when risk is reduced through diversification. The return is not considered in this choice to choose or not choose a fund. Last year's return darlings become tomorrow's dogs and it can happen quickly.

 

http://enroll.tiaa-cref.org/Resources/CustomFiles/calstrs_easy_choice_ports.pdf

The 2020 fund is for somebody who is retiring around 8 years. It has a 29% equity and 71% fixed (bonds). I think it's a great choice because you have all of the bases covered with a broadly diversified portfolio including inflation protection and TIAA CREFs traditional annuity. I think it's a good choice for somebody close to retirement.

 

I am going to be 65 in a few months and I have a similar portfolio with 30% in stocks and 70% in bonds. My portfolio earned 2.6% last year, but over the last three years it earned an average annual return of 9.2%. I am happy since it recovered from a 11.9% loss in 2008.

 

If you have any more questions, we are here to help.

 

Have a great day,

Steve

 

 

Thanks Steve,

I did call them and they could not give me any rough figures on the performance of the fund. They said I would have to figure this out and I do not know how.

I just wanted to have some kind of guideline.

Thanks

 

 

Sorry you had trouble finding the information you were looking for. If you go to www.Pension2.com there is a link on the right had side of the page about half way down under "Quick Links" entitled "Quarterly Performance". The PDF document that launches contains performance information for all of the funds available under Pension2, including the Easy Choice Portfolios (page 5). Specific to your question, the Conservative 2020 fund returned 3.14% for calendar year 2011. On the Pension2 site you can also find allocation information for each of the Easy Choice Portfolios, which are set up with particular risk-tolerances and retirement dates in mind. If there is any additional information we can provide, CalSTRS Pension2 program can be reached at 1-888-394-2060.

 

 

Thanks Brian,

It's great that somebody from CalSTRS comes here to answer questions, assuming you are from CalSTRS pension2. The OP wanted the calendar year return for 2011 of that 2020 conservative portfolio. The page 5 reports through Aug 31, 2011 with 3 month, YTD, etc. etc. I am also interested in the calendar year returns of all of these portfolios since inception, from 2007 through 2011.

Thanks in advance,

Steve

 

 

Yes I am from CalSTRS, sorry for not clarifying. We are always here to answer any questions. Specific to the above request, the information on the Pension2.com site is current as of 12/31/2011 and includes 3 month and year-to-date returns, as well as 1 year, 3 year, and since inception returns for all Easy Choice Portfolios. The performance numbers are updated quarterly and 3/31/12 numbers will be posted to the site in the next few days.

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