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krow36

Security Benefit’S Nea/direct Invest & Vanguard Admiral Funds

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Dan,

Of course NEA is not on our side, and never have been. They managed to fool even some of our most savvy teachers who think Direct Invest is a viable option. If it is, why does NEA and their minion, Security Benefit, make it impossible to enroll? This is what we all suspected for years. My original instincts were right about NEA and their 403b, Direct Invest too. And it answers one important question. Has anybody in the country enrolled in the Direct Invest plan? If so, just exactly how many?

 

I think the discrepancy between NEA 401k and what their so-called conflicted financial advisers give to their members is a HUGE story! If nobody in Security Benefit can help NEA members in the Direct Invest option, what is the point!? Based on the stories here, at least two people wasted two months of their valuable time playing this back and forth crap with NEA Security Benefit rip off machine, and have gotten no where. Once again, will we ever find out just how many NEA members have actually enrolled in the Direct Option plan? Or does this option really exist?

 

ALWAYS, always remember in the 403b world with k-12, there are no regulations nor any incentives for anybody in NEA, Security Benefit, and the industry to protect teachers, NONE! NEA has gotten away with this because they can. Every federal and state law supports NEA and security benefits behavior.

 

NEA lawsuit says it all. You are correct Dan. Direct Investment was created right after NEA won that law suit so they can say they have a low cost plan. But now we find out there is a huge back door for NEA. Based on the two teachers on this thread, the security benefit direct investment means nothing if they cannot get enrolled.

 

The NEA lawsuit plaintiffs, two of their own teachers lost, and it was not a long drawn court fight at all. The judge threw the case out immediately both on the first trial and the appeal because the attorneys argued from a fiduciary POV. That's it! Very simple. All of the debate about fiduciary standards circulating everywhere where DC plans are used are for ERISA regulated plans only. None of these new fiduciary standards apply to public k-12 DC plans.

 

Its a sad time. I have been a loyal union member all of my career. I went on strike once and supported everything that my union did for me and my colleagues which was a lot. BUT all of the unions fall flat on their face when it comes to 403b plans. Not one bright union leader that I know of has ever wanted to know more about what can be done to reform the 403b, and their are many bright high level union people. Many have low cost 403b plans just like I did, but their attitude has been that when it comes to policy, the 403b is a private matter!

 

Steve

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Just want to give a quick update of my progress (or lack of) regarding Security Benefit's Direct Invest program. I originally started my application in December of 2015. I went back and forth between Security Benefit and my payroll office to try to establish this account for months. I most recently had a meeting with payroll and discovered that Security Benefit was asking for information that my district wasn't familiar with. Specifically, Security Benefit was asking for an "Employer Adoption Agreement." Security Benefit also stated that a potential hold up was due to our third party administrator- Plan with Ease. I've moved on and I'm in the process of filling out an application with Aspire. I wish I was able to see this through so I could assist others who are attempting to enroll in Security Benefit's Direct Invest program. I hope the Aspire enrollment is far less complicated.

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Your experience matches what others here are saying. Good that you went with Aspire. Thanks for sharing your experiences so others can avoid what you went through.

 

Tony

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I'm so happy to see that this thread has become active again!

 

I recently submitted my paperwork electronically to set up a Direct Invest account. Once I have my account set up and in order I will be transferring all my funds from my existing 403(b)(7) to three of the eight Vanguard funds that are offered with Direct Invest.

 

While setting up this account requires legwork on my part (the financial advisor for Security Benefit who is our school rep does NOT set up this account or assist in ANY way) in terms of initiating the account and rolling over my money, I'm counting on the prospect of MUCH lower fees to make up for years of lost ground.

 

Does anyone have any updated information about how their accounts are doing with the Direct Invest option?

 

Hi terragram66,

You asked for updated information back in July, and I wonder if you've seen this thread? https://www.bogleheads.org/forum/viewtopic.php?f=1&t=183188

corrysold reported as of July that his wife's Direct Invest 403b (started Jan 1, 2016) is running without any unpleasant surprises. Teacher88's experience in moving his old accounts into Direct Invest is also interesting.

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Hi terragram66,

 

This is what all of us here had suspected for years when you said: "the financial adviser for Security Benefit who is our school rep does NOT (your emphasis, not mine) set up this account or assist in ANY way)."

Let me repeat: "...does NOT set up this account or assist in ANY way." Absolutely no assistance. This reminds of the dark ages, 20 years ago, when I was simply trying to get a list of no-load mutual funds from my district. These people are so corrupted by the monopoly of making money off of teachers, they will NOT assist in any way. SB is relentless on taking care of their best interests--making money off NEA members.

All mutual fund companies assist on the phone, but NOT NEA SB! Especially the low-cost Vanguard and TIAA. But Vanguard and TIAA are ethical companies that look out for our interests.

 

But things are changing, and we are in the middle of it right now.

 

Looks like SB self-directed program is what they billed it as a low-cost plan. Look forward to hearing from you at the end of the year to find out if their are hidden fees.

 

have a great day and thanks krow for bringing this up.

 

Steve

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Hey there!

 

Since I last posted, I was able to set up my Direct Invest account with Security Benefit. Let me be clear, I set it up from scratch--on my own. There were a few hurdles to jump in terms of the initial application, and getting it cleared with my district's business office and Security Benefit. But, once my account was set up, transferring my money from my fee-laden 403 (b) nightmare was easy and quick. In sum, with the initial hiccup of setting up my account, the whole process took about a month and a half. Well worth my time this past summer. Perseverance was key, though. I did have to keep calling to make sure everything was moving along.

 

I decided to set up my account with three Vanguard funds--Total Stock Index, Total International Stock Index, and Intermediate Bond Index. I may reallocate down the road--which is easy to do! I have complete online access and CONTROL over how I wish to move my money (unlike my previous account). In terms of returns, the market has been fluctuating, and so has my account. BUT, unlike my old account, I do see how returns are being reinvested.

 

So, the bottom line? So far, so good. I'm more than happy to keep you all posted.

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The "initial hiccup" that I referred to had to deal with my business office not understanding that i could set up my own account without the help of a Security Benefit "advisor." There was some back-and-forth between Security Benefit and my school district at the beginning of the account setup process to verify my employment status, etc. This took about two weeks to iron out.

 

Again, being diligent--and checking on your application status--is key!

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One of the teachers featured in the first NY Times article on problems with 403b plans in K-12 school districts was a Ms. Jusinski. She ended up moving her account from an outrageously expensive annuity with Legend Group to the NEA Direct Invest plan.

"As for Ms. Jusinski, the technology teacher in New Jersey, she has wrested back control of her retirement account, investing in the union’s do-it-yourself option. But she worries about her fellow teachers all over the nation, still stuck in costly 403(b) plans."

 

Thank you Tara Siegel Bernard, the NY Times, and Ms. Jusinski for sharing your story!
In the article, the NEA Member Benefit CEO says they are offering the Direct Invest option along with the outrageously expensive annuity and MF based options “to meet the diverse needs and comfort levels of members.” Of course the Security Benefit reps sell the expensive plans, and the offered low cost plan isn't mentioned or explained by the reps.
The NEA Direct Invest option is not included in the information that Security Benefit submits to 403bcompare.com. This information is used throughout the country to understand the offerings and fees of vendors of 403b plans. NEA could insist that Security Benefit submit this information, but it has not done so. Is NEA looking out for their union members, or for the over $2 million they receive from Security Benefit for the use of their name? I think we know the answer.

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Update on my end. Security Benefit never worked out. I had moved to open an account at Aspire after having many discussions with my district's accounting office... then, right as my first salary reduction was scheduled to be sent to Aspire my district released a new authorized provider letter. Fidelity was a new (random) addition on the list. I opened an account with Fidelity using all incredibly cheap index funds and the rest is history. I think the poking around and question asking may have helped.

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Hi PE,

At the very least, you were smart enough to come here and ask the right questions and then your district began offering fidelity, and like you said "the rest is history."

Congrats,

Steve

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It is a goal of mine to educate others in my district and get them to move out of AXA. I'm in the process of putting together some resources and planning a workshop.

Thanks for the help over the past months.

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