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krow36

Podcast #26 Covering National Education Assoc. And Security Benefit Re

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Thanks for all the podcasts that Scott Dauenhauer and Dan Otter have produced. Listening to the latest one, #26, I find it very interesting that Scott and Dan may be responsible for the NEA Direct Invest 403b because of their talk with the NEA MBC employee! I’ve been trying to find out about Direct Invest for several months. I’m a retired teacher and former 403b investor, hoping to be able to help teachers who come to the boglehead and 403bwise forums.

In the podcast you say that NEA Direct Invest is: “not terrible”, “not too bad”, “not promoted” and “not easy to get money into it”. It seems to me that it is better than that. It includes 8 Admiral class Vanguard index funds, for instance:
Vanguard Total Stock Market Index ER 0.05%
Vanguard Total International Stock Index ER 0.14%
Vanguard Intermediate Term Bond Index ER 0.10%
The fees listed in the "Security Benefit Custodial Agreement" (Section ):
An annual fee of $35 for accounts of less than $50,000.
A annual fee of $30 if the employee revokes their agreement to receive all communications by mail instead of electronically.
A $25 withdrawal fee for any withdrawal not requested through the employee’s online account.
On the face of it, this looks like a very good option for a DIY investor, doesn’t it? This option is not hidden on the Security Benefit or NEA websites, but as you say on the podcast, it’s certainly not promoted. It is supposed to be for DIY investors who don’t need a sales rep. It is missing from Secure Benefit’s’ offerings on the 403bcompare website, which is disappointing! Scott and Dan, if a K-12 employee comes to you with a district's list containing only insurance companies, including Security Benefit, would you recommend Direct Invest?
Steve and I have discussed Direct Invest in another thread and he is waiting for an investor to report a full year’s contributions to see if there are hidden fees not disclosed by Security Benefit: http://board.403bwise.com/index.php?showtopic=6120

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At the end of the podcast Dan and Scott discussed briefly NEA 401(k) plan with their own 700 employees. I praised NEA for looking out for their own employees (we can always talk about how they screw their members in the 403b offerings all day long. We have been condemning their Security Benefit 403b since the 1990s and NOTHING HAS CHANGED, except of course the DIY option that literally remains behind the curtain for vast majority of members and none of their sales people ever mention it).

 

Anyway, NEA has changed to help their employees: http://latebloomerwealth.com/2015/03/21/looking-for-a-great-employer-sponsored-retirement-plan/

 

Brightscope rated NEA's 401(k) plan 80 out of 100 points and its because NEA has Vanguard: https://www.brightscope.com/401k-rating/256985/The-National-Education-Association-Of-The-United-States/261116/National-Education-Association-401K-Retirement-Savings-Plan/

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