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MattP

403B Enrollment Statistics

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Over the last year I have become more educated about my defined benefits plan and my 403b options (thanks in large part to the Teach and Retire Rich book/podcast and this forum). I have tried to spread the word to other teachers in my district with limited success. One of my ideas is to provide teachers with the statistics from our own district on how many people are enrolled in our various 403b options and then provide them with the fee structures. Some of us (myself included) have been paying companies like MetLife and AXA 1.15 - 2.5% in fees (plus the fund fees) when we could be investing in Vanguard directly. Can I just contact my district administration and get info on how many employees are enrolled in the various options? Is there some type of 403b statistical database/information available at the state or national level?

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Each district has a third party administrator (TPA) that keeps records. Ask the TPA for a print out. Been prepared for some push-back because they don't like teachers asking for this type of information. In the 403b world with public k-12 districts, transparency is still a dirty word. But you have every right to know this information. Let us know what they say to you.

 

Ask your state's pension plan for information about their 403b plan (if they have one). If you are in California, CalSTRS has information about how many teachers are enrolled in their terrific Pension2. Pension2 is our state's low cost 403b plan.

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I just emailed our TPA (PenServ) to get my district's numbers. I teach in Pennsylvania. I am pretty sure we do not have a state sponsored plan. I'll keep you posted.

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I emailed both my TPA and my district early last week to ask for our 403b enrollment statistics. Neither responded. This week I am going to call them. After talking to teachers in my building, I estimate that about 50% are enrolled in a 403b plan. However, it seems that only a handful invest directly with Vanguard (we can invest with Vanguard directly through our TPA). Also, most of the teachers I spoke with didn't know how or where their money was invested. And not one of them knew how much was paid in fees. I have used the 403b Compare site to show a few of the teachers how much fees are costing them. And to top it off, most have rolling surrender charges. Which if I understand correctly, severely hinders the process to move money out of these costly funds. Ouch!

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MattP,

Districts will not respond by email because it leaves a "paper trial." The TPA will tell you that they have to get permission from the district first. Districts are always, ALWAYS over-the-top concerned about liability and the TPA want to keep their products a secret so you will not inform your colleagues about the high costs. This has been my experience and all I was asking was to put a link to 403bcompare on each insurance company that is on our 403b list. The TPA dragged its feet for months, and they finally did it. Here is what it looks like: http://www.tsacg.com/lausd/lausd_authip/

I think its very cool.

 

Lets see if phoning them works, you may have to go face to face and let them know in person that you are not threatening Western civilization. I kid you not. There is a long history about districts and unions being secretive about what they do with the information they have. My free pdf downloadable book, Fighting Powerful Interests, is exactly my story about trying to reform this insanity. Things have changed, but not enough. As you experienced, many of your colleagues have no clue of what they are paying in costs.

 

Take plenty of paper and a sharpened pencil and get ready to copy, because they may not provide a ready made copy for you. It they refuse to give you any information, let us know. There is a phone number where you can report this, but I don't know at the moment. But lets see if they give you the information first, before we go that far.

Steve

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Steve,

When I checked Security Benefit on the 403bcompare website, I found only 2 products:

NEA Valuebuilder Variable Annuity

NEA Valuebuilder, 403b7, 457b7 & IRA

Sort of interesting that there’s no NEA Valuebuilder Direct Invest, isn’t it?

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Same with Los Angeles USD: https://www.403bcompare.com/Employee/Vendor/VendorProductList.aspx?vid=1794

 

No Direct Invest either. Although there are three mutual funds and seven annuities available. Looks like teachers have to use an adviser and said adviser will get a commission. Many of the MF products charge commissions.

 

I looked at several other school districts and got the same SB list. But you said only 2 products are available at your district.

 

Anyway, your original question about enrollment? Did you find anything?

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Steve, sorry for posting off the OP's topic. I was following your post on 403bcompare. I should have started a new thread. I hope the OP gets the info from the TPA.

You say: "Looks like teachers have to use an adviser and said adviser will get a commission. Many of the MF products charge commissions."

Yes, that’s what Security Benefit has made it look like by omitting the NEA Direct Invest 403b on 403bcompare. I also checked several school districts and found no NEA Direct Invest, mostly just the NEA VB MF option 3 and the NEA VB variable annuity 403b’s. Also various annuity programs. NEA Direct Invest is certainly available on SB's own website. http://www.nearetirementprogram.com/#!investment-products/c1ldv

SB doesn't want CA teachers to know about the NEA Direct Invest?? Why do you think that would be?

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SB doesn't want CA teachers to know about the NEA Direct Invest?? Why do you think that would be?

 

Don't get me started on California. Nowhere in this state, except our LAUSD advisory committee, is there on going discussion about public school districts and their 403b or 457b plans. Nobody has the guts to inform our 800,000 active educators about low cost options, because they are afraid of "recommending" and therefore getting themselves set up for liability. Even with our committee nagging LAUSD to brag about their own award winning 457b plan, our district will not publicize it. LAUSD will never sponsor any type of education program either. Thanks to the hard work of one of our committee members, Sandy Keaton, with no help from benefits administration, she coordinated twice a year workshops that have been attended by over 500 employees. That's it!

 

Still, I remain optimistic as more and more of us keep talking about these powerful plans, 403b and 457b plans, which supplement our CalSTRS, so we can retire when we want to, not when the CalSTRS benefit reaches 100% of our salary (yikes and with all that stress trying to get to 38 years!).

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