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bobwhitesr

Smaller Non-State 457 Plans?

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I'm interested in Pennsylvania 457 plans available to Teachers. The current school district does have a 403b plan, but no access to a 457 plan. The Commonwealth of PA, held by Great West, does have a 457 state plan, but unlike other state plans, this one does not allow teachers access. It was suggested to my by Great West that I see if the school district itself could open it's own 457 hosted by someone. Is this really a possibility? Is anyone aware of a good no-load fund company that would offer such a service? The idea would for the school to keep it's current 403b program, but then have access to a 457 plan as well.

 

I spend half an hour being passed around from department to department at Vanguard before finally being told that they don't do 457s, at all, anywhere.

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Vanguard may not do 457Bs directly but their funds are available in such plans.

 

In Virginia our 457b is with Blackrock investments and is administered by ING. However our state plan got what it wanted and we have access to index and other funds cheaper than you can get even at Vanguard. Its a darn good plan. It happened because someone knew what they were doing and understood low costs and worked to get state employees the best possible plan.

 

I am not sure your district could get a 457 plan on its own. I would imagine that part of the reason state plans can get such low expenses is because they have large amounts of participants. But I really don't know for sure.

 

I would question why if you are a state employee you are not allowed to participate and how you could possibly work to make that happen.

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Guest Joel L Frank

Bob: Too many states in our great nation reserve their 457(b) Plan for their state employees. This is yet another severe abuse inflicted on local governmental employees. The unions representing these employees have been out to lunch for decades. Try to see what your union in PA can do about getting you into the statewide plan. Most of these statewide plans have the best DC plans in the nation.

 

Getting one just for your local employer is not the answer inasmuch as it will be just another feeding frenzy for the sale of commission based investments.

 

Joel

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Vanguard may not do 457Bs directly but their funds are available in such plans.

 

In Virginia our 457b is with Blackrock investments and is administered by ING. However our state plan got what it wanted and we have access to index and other funds cheaper than you can get even at Vanguard. Its a darn good plan. It happened because someone knew what they were doing and understood low costs and worked to get state employees the best possible plan.

 

I am not sure your district could get a 457 plan on its own. I would imagine that part of the reason state plans can get such low expenses is because they have large amounts of participants. But I really don't know for sure.

 

I would question why if you are a state employee you are not allowed to participate and how you could possibly work to make that happen.

 

Interesting. I've had some experience with ING. They are currently the most expensive vendor on our 403b plan mostly because all you can get through them are loaded funds in a annuity with a 1.25% M&E. I know that's an apples to oranges comparison. Glad you got such a good plan.

 

PA Teachers have pensions so perhaps for that reason they didn't see getting onboard the 457 plan as a priority. Pensions are being cut now so maybe they'll start lobbying to get on the 457.

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Bob: Too many states in our great nation reserve their 457(b) Plan for their state employees. This is yet another severe abuse inflicted on local governmental employees. The unions representing these employees have been out to lunch for decades. Try to see what your union in PA can do about getting you into the statewide plan. Most of these statewide plans have the best DC plans in the nation.

 

Getting one just for your local employer is not the answer inasmuch as it will be just another feeding frenzy for the sale of commission based investments.

 

Joel

 

 

You make some good points and I agree teachers should lobby to get access to the 457 plan. But that's a political and state matter whereas I was trying to see if anything could be done on a local matter. I think if competent knowledgeable people are setting up the 457 then you could get a good local plan, but I don't know how much Great West would charge. Looking at PA and other states I've seen their rates go from 0.08% thru 0.10%. Then again, I'm having a lot of trouble just getting the school and the TPA to add a vendor for the current 403b plan. I'm probably just dreaming to think they'd set up a 457 option.

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Guest Joel L Frank

Your recent post is proof positive that guy/gals that think like you think should work on getting the State of PA. to include local governments in the State's 457 Plan. NY has had it for decades!!! Use their website as bullets to make your case. If you don't do it, who will?

 

Having said that, the State of PA. has a single pension plan for all of the state's teachers. Just like each school district/municipality can have its own 457(b) plan why not have each school district adopt its own pension plan, the law permits it? Sounds quite ridiculous, right? So why continue this stupidity by permitting each school district and municipality to run its own 457(b) plan?

 

Joel

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Your recent post is proof positive that guy/gals that think like you think should work on getting the State of PA. to include local governments in the State's 457 Plan. NY has had it for decades!!! Use their website as bullets to make your case. If you don't do it, who will?

 

Having said that, the State of PA. has a single pension plan for all of the state's teachers. Just like each school district/municipality can have its own 457(b) plan why not have each school district adopt its own pension plan, the law permits it? Sounds quite ridiculous, right? So why continue this stupidity by permitting each school district and municipality to run its own 457(b) plan?

 

Joel

 

 

I appreciate where you're coming from but I've spent at least 40 hours in the last two months calling and researching vendors, creating spreadsheets, speaking with fellow employees, and playing middle man between an uncooperative TPA and an an apathetic business office. And so far I can't even get a single no-load vendor added to the plan. In fact, when I've tried to explain to fellow employees the benefit of low fee no load index investing they show almost no interest, and these are people that would directly benefit from getting a better vendor selection. So I think I'll pass on your suggestion to lobby the Commonwealth of Pennsylvania to change their 457. The teachers unions really should play that role and probably will as pensions get squeezed.

 

I do agree it makes more sense to have one 457 for the whole state and let teachers (and perhaps others) get in on it, but that's not the way it is. I was simply trying to learn if creating a 457 on a local level was feasible. I'm quite ignorant on the topic. A month or so ago I didn't even know such plans existed. Meanwhile, some states do offer their employees multiple 403b plans to choose from. One local, one on the state level. I don't think that's stupid.

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Guest Joel L Frank

Think of all the things the States do better than local governments, including SD. Retirement planning for public employees is one of them---this is the reason for statewide pension systems for all public employees in a state, regardless of who the public employer is. A supplemental voluntary plan i.e. the 457(b) should be side by side, in the same boat, with the statewide pension system.

 

Joel

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