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techteacher

Bringing Low Cost Options To District

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Hello all, I am new to the forum and a little late to this thread, but I do have experience with getting my school district to add a low cost vendor. So I thought I would share my story.

 

I was with AXA and like many others, was uneducated and unaware of the crazy fees I was paying. When I tried to transfer my 403b to another district sponsored provider, I found out that my only other choice was MetLife. I was comfortable managing my own 403b funds, and wanted a self-directed and much less expensive option. I came across an article about a math teacher from New Jersey named Bruce McNutt. Seems Bruce was not too happy about the fees he was paying either and he wanted a better option, namely Vanguard. He gained the support of some of his peers and lobbied the school board to add Vanguard. It worked! So I started my crusade to add Vanguard to my school district list of approved vendors.

 

I wasn't quite sure how get started. But I knew I had to act. So, I contacted my district's union president and was invited to give a presentation to union building reps. I shared with them the power of compounding interest, and how numbers that seem relatively small like 1% and 2%, can crush long term growth. And why it is important for our district to offer a low cost, self-directed option. I made myself available after school to do presentations to any school in my district (I teach in a large suburban district in Pennsylvania which has 23 schools). I gave several presentations, including a presentation to the faculty at the high school in which I teach and started to educated my peers about the importance of having choices and paying lower fees. Momentum started to build and I collected several hundred signatures on a petition to include Vanguard as an approved vendor (as it turns out, I never needed the petition).

 

My union president arranged a meeting with the district business manager and head of payroll. I gave my presentation to them and approximately a year later, Vanguard was added to our approved vendor list. Now, there were several follow up discussions and emails, to make sure that the subject didn't just go away, but I never had to approach the school board or superintendent personally.

 

Great work Bart, and a wonderful story when all of the people in a position of influence are with you.

 

Dan: I see another podcast story!

 

Again, great work Bart,

Steve

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I wish to congratulate you as well Bart. So far I have been unable to get the district to add Vanguard or other low cost option.

 

Krow pointed me toward PlanMember Direct which has low-cost index funds e.g. VTSAX with 0.05% ER and a 0.34% annual fee from PlanMember. I'd prefer to go directly with Vanguard, but am settling for this for now.

 

Since my district offers both 403(b) and 457(b), I am taking advantage of both.

 

With a $130 million district shortfall for this coming year and a year-long impasse with contract negotiations it's a tough time to be asking for anything.

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techteacher sounds like your district is going through a tough time. However, when things normalize, renew your push to add a low cost option for your district. In the meantime, keep talking to teachers in your district and educate them on this topic. You and every other teacher in your district deserves a low cost option.

 

"There are risks and costs to action. But they are far less than the long-range risks and costs of comfortable inaction" -John F Kennedy

 

Good Luck!

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It's been a while since my last post and I wanted to provide an update.  I have been entirely unsuccessful in reaching our Director of Employee Engagement - oh, the irony! Emails, showing up at the office, putting in a "ticket", reaching out to the head of Human Capital have all been met with deafening silence.  I cannot even get my foot in the door to discuss adding a low cost option.

I have not given up, but making the change has been a low priority. I am happy for those who have been successful.

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