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Large Colorado School District "freezes" Its 403(B) And 457 Pl

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St. Vrain Valley School District in Longmont, Colorado is the 9th largest school district in the state. The District recently "froze" its 403(b) and 457 plans in favor of participating exclusively in the State's PERAPlus 401(k) and 457(b) plans; thus providing a simple, low-cost option to all employees going forward.

 

https://blogs.svvsd.org/retirementplan/plan-revision-information/

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Guest Joel L Frank

AND THE FIDUCIARY BAND CONTINUES TO MARCH UNTIL ALL THE 403(b) PREDATORS ARE EXTINGUISHED!

 

I would terminate both plans in lieu of freezing them. Upon termination these account balances can be rolled into the PERAPlus 401(k) and 457(b). The affected investors must see that they will continue to shoot themselves in the foot if they maintain these accounts and will be adding insult to injury should they elect to make future contributions to these predatory plans. Surely many of these account holders would roll their balances over to PERA Plus in a heart beat if given the opportunity. Why should they be forced to wait until attainment of age 59-1/2 to do so when a plan termination allows them to do it now?

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AND THE FIDUCIARY BAND CONTINUES TO MARCH UNTIL ALL THE 403(b) PREDATORS ARE EXTINGUISHED!

 

I would terminate both plans in lieu of freezing them. Upon termination these account balances can be rolled into the PERAPlus 401(k) and 457(b). The affected investors must see that they will continue to shoot themselves in the foot if they maintain these accounts and will be adding insult to injury should they elect to make future contributions to these predatory plans. Surely many of these account holders would roll their balances over to PERA Plus in a heart beat if given the opportunity. Why should they be forced to wait until attainment of age 59-1/2 to do so when a plan termination allows them to do it now?

 

This was a big concern of ours. The thing was, we had a hard enough time as it was freezing the plan and choosing the state plan going forward. There were members on the committee that are very pleased with their 403(b) representative and didn't want to see that go away. It was a bit of a compromise to get what we did in exchange for allowing old participants to continue in the plan in its frozen status. Baby steps I guess.

 

I agree with you, however, and desired to have the plan terminate, thus allowing a rollover. I've already had employees ask if they could rollover their money and I'm always dismayed to have to tell them that they can't.

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Guest Joel L Frank

I agree with you, however, and desired to have the plan terminate, thus allowing a rollover. I've already had employees ask if they could rollover their money and I'm always dismayed to have to tell them that they can't.

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So a few members of the committee that are very pleased with their 403(b) rep are preventing termination and thus forcing those that would like to rollover to the state plan to wait until age 59-1/2 to do so. Doesn't sound too democratic to me. Wiltony, being a fiduciary is like being pregnant. There is no such thing as being partially pregnant and there is no such thing as being a partial fiduciary.

 

Why don't you take a popular vote of all those eligible to particpate in the frozen plan? Don't you think that is the democratic thing to do?

 

Best,

 

Joel

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Just put this on 403(b)wise home page

 

What I especially like about this was that, according to to the FAQ question Why is this decision taking place?, the change was made due to a survey in which employees expressed an interest in "improved plan design, better education and communication, and lower fees."

 

Dan Otter

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Joel,

 

This is what happened to us in 2009....all of the accounts were frozen at LAUSD, but, at least we could roll out of them. It is unbelievable that the CO committee people do not understand their responsibility.

 

Since Fidelity and TC are not available, PERAPlus, is much better than the 5 predator vendors. PERAPlus does, however, employ some of these same insurance companies as money managers for their proprietary funds.

 

Fortunately, for self-directed accounts, PERAPlus utilizes TD Ameritrade.....a premier internet broker known for low fees and excellent telephone service. Bob

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Guest Joel L Frank

"PERAPlus does, however, employ some of these same insurance companies as money managers for their proprietary funds."

 

Hi Bob,

 

This is fine so long as the total costs to the worker-investor is low. I consider low, to be, no more than 50 bp. The PERA Plus is one of the best DC plans in the nation.

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