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Comparing 403bs

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F. T., So ING sells their products for more in California than in New York, interesting. The next time I run into an ING salesperson, I'll ask why. Better yet, when I get time, I'll contact ING and ask why.

 

 

Joe, the deal with ING was negotiated for NYSUT members by NYSUT. In fact, in the much-cited "Shark Attack" article put out by the AFT, NYSUT was specifically cited as an example of a union that had done right by its membership by negotiating a much better deal for its members than was available in the general marketplace.

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You may also want to know that the largest local affiliate of the NY State Teachers Union, the United Federation of Teachers in NYC has never allowed ING to sell its 403b products to its members. About 50 percent of the state's teachers teach in the City.

 

I wonder what your reaction would be if NYSUT didn't allow no-load vendors to be represented in NY? I'm guessing not as positive as the obvious pride you take in the UFT for banning ING. I have never understood why LIMITING choice is a good thing in your eyes. Guess it's a good thing when your agenda is being forwarded, and not so good when the shoe is on the other foot?

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Guest Sierra

Some school systems are revamping their 403(b) offerings. In Chicago, for instance, a new program is expected to save employees more than $6 million a year in fees. Before the change, according to a school official, teachers paid 2 percent to 3 percent in fees and more than two-thirds of their money was tied up in fixed investments. Now Chicago school workers can buy no-load funds and reduced-fee annuities through three companies.

 

The New York State United Teachers, Education Minnesota and the United Federation of Teachers (New York City) have also used their significant clout to force positive changes in the 403(b) options offered to their members and to reduce administrative expenses.

++++++++++++++++++++++++++++++++++++++++++++++++

The above quotes come from the Shark Attack article published by the AFT. I think the author simply did not know the details of the Opportunity Plus VA endorsed by NYSUT. It is a case of the right hand not knowing what the left hand is doing. Kind of embarassing to say the least. If he did he would not have included NYSUT in the same paragraph as Education Minnesota and the United Federation of Teachers in NYC, both of which have always opposed the payment of a commission to acquire a 403(b) investment. The author is obviously advocating no-load investing.

 

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The New York State United Teachers, Education Minnesota and the United Federation of Teachers (New York City) have also used their significant clout to force positive changes in the 403(b) options offered to their members and to reduce administrative expenses.

++++++++++++++++++++++++++++++++++++++++++++++++

The above quotes come from the Shark Attack article published by the AFT. I think the author simply did not know the details of the Opportunity Plus VA endorsed by NYSUT. It is a case of the right hand not knowing what the left hand is doing. Kind of embarassing to say the least. If he did he would not have included NYSUT in the same paragraph as Education Minnesota and the United Federation of Teachers in NYC, both of which have always opposed the payment of a commission to acquire a 403(b) investment. The author is obviously advocating no-load investing.

No, Joel, that's how YOU are choosing to SPIN what the Shark Attack article says. What the article really says is that "New York State United Teachers ... have used their significant clout to force positive changes in the 403(b) options offered to their members and to reduce administrative expenses."

 

Now, you may well prefer the changes that the UFT have brought about. Fine. But don't pretend (or, worse yet, actually BELIEVE) that NYSUT has not played a positive role in the 403(b) process for their members. We (the membership) aren't buying it.

 

Among the positive changes:

 

* reduction of the M&E fee to 1%. Sure, zero would be better. 1% is still the best available option among the full-service vendors.

* elimination of the annual account fee. Many other vendors charge $25-50 annually just for the privilege of having an account with them.

* elimination of front-end sales charges.

* elimination of back-end sales charges.

* membership in a Financial Counseling Program, affording the independent advice you claim everyone should have.

* membership in a Legal Service Plan.

 

There are other changes too. These are the ones that come to me off the top of my head.

 

The author of the "Shark Attack" article knew EXACTLY what (s)he was talking about, and you know it.

 

 

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Guest Sierra

Some school systems are revamping their 403(b) offerings. In Chicago, for instance, a new program is expected to save employees more than $6 million a year in fees. Before the change, according to a school official, teachers paid 2 percent to 3 percent in fees and more than two-thirds of their money was tied up in fixed investments. Now Chicago school workers can buy no-load funds and reduced-fee annuities through three companies.

+++++++++++++++++++++++++++++++++++++++++++++

Opportunity Plus/ING charges 2-3 percent in total fees. 1 percent is just for M & E. This equates with the abusive charges that Chicago teachers were paying before, like the author tell us, no-loads were offered to its teachers. Any reasonable person would come to the conclusion that the Shark Attack article was telling its readers to stay away from Opportunity Plus/ING in favor of investing in no loads.

 

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Opportunity Plus/ING charges 2-3 percent in total fees. 1 percent is just for M & E. This equates with the abusive charges that Chicago teachers were paying before, like the author tell us, no-loads were offered to its teachers. Any reasonable person would come to the conclusion that the Shark Attack article was telling its readers to stay away from Opportunity Plus/ING in favor of investing in no loads.

 

And right here is where the train leaps the tracks, as you go from fact into fiction.

 

1.) Opportunity Plus does NOT charge 2-3 percent in total fees. As an Opp Plus investor, I tell you this is true. It may be possible to go past 2% in overall expenses if you are heavily invested in overseas markets, but otherwise, 2-3% is simply inaccurate. Shame on you.

 

2.) Any reasonable person who understood simple english would come to the conclusion that the Shark Attack article thought NYSUT was doing good work on behalf of its members. The sentence that they used is NOT difficult to understand, nor is it fraught with double meanings: "New York State United Teachers ... have used their significant clout to force positive changes in the 403(b) options offered to their members and to reduce administrative expenses." I went out of my way to illustrate the MANY ways in which NYSUT's work has resulted in reduced administrative expenses and better options to our members. Your desire to ignore all that doesn't make it any less true. Nor does putting words in the mouth of the article's author, who was otherwise quite capable of saying exactly what (s)he meant.

 

 

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Guest Sierra

Now, you may well prefer the changes that the UFT have brought about. Fine. But don't pretend (or, worse yet, actually BELIEVE) that NYSUT has not played a positive role in the 403(b) process for their members. We (the membership) aren't buying it.

 

Among the positive changes:

 

* reduction of the M&E fee to 1%. Sure, zero would be better. 1% is still the best available option among the full-service vendors.

================================================

"We the membership" I did not know you speak for the membership. Why is it that no other Opportunity Plus participant has posted on this board? Surely you have told your colleagues about us. Like Joe has asserted, your 1 percent fee while less than the 1.25 percent the good folks at ING charge California teachers is still "junk".

 

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Guest Sierra

Here are a few more quotes from "Shark Attack as published by your parent union the AFT.

=================================================== How costly can fees become? Here is an example borrowed from Steve Butler and cited in an article in the New York Times. A couple contributes $10,000 a year to a retirement program through equal deductions twice a month. If they earn 10 percent a year, after fees, they will have $641,000 after two decades. After three decades (through the magic of compounded interest) their portfolio will have grown to $1.9 million.

 

But if their annual fees are just 1 percent higher, so they earn 9 percent on their investments, they will have $75,000 less after 20 years and $355,000 less after 30.

 

Annuities, the most common vehicle for 403(b) plans, come wrapped with a layer of insurance and extra fees.

 

Surrender fees, assessed if the annuity is sold within seven to 10 years after purchase, can be as high as 8 percent. Life insurance, covering only the amount invested (not growth on the investment) runs about 1.25 percent. Some insurers will guarantee a minimum amount of investment growth but little more than can be realized in the most conservative investments.

 

The average 403(b) annuity charges administrative costs of 2.11 percent of assets a year, according to Morningstar Inc., a financial research firm. By comparison, the average mutual fund has expenses of 1.36 percent. Many large mutual funds, such as those offered by the Vanguard Group, have expenses as low as 0.18 percent of assets each year. Compounded over the span of one's career, the difference in fees means serious money.

===============================================

ARE YOU STILL GOING TO STAND THERE AND ASSERT THAT YOUR AFT, BASED ON ITS SHARK ATTACK ARTICLE, ADVOCATES INVESTING WITH OPPORTUNITY PLUS/ING OVER NO-LOADS?

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Here are a few more quotes from "Shark Attack as published by your parent union the AFT.

=================================================== How costly can fees become? Here is an example borrowed from Steve Butler and cited in an article in the New York Times. A couple contributes $10,000 a year to a retirement program through equal deductions twice a month. If they earn 10 percent a year, after fees, they will have $641,000 after two decades. After three decades (through the magic of compounded interest) their portfolio will have grown to $1.9 million.

 

But if their annual fees are just 1 percent higher, so they earn 9 percent on their investments, they will have $75,000 less after 20 years and $355,000 less after 30.

 

Annuities, the most common vehicle for 403(b) plans, come wrapped with a layer of insurance and extra fees.

 

Surrender fees, assessed if the annuity is sold within seven to 10 years after purchase, can be as high as 8 percent. Life insurance, covering only the amount invested (not growth on the investment) runs about 1.25 percent. Some insurers will guarantee a minimum amount of investment growth but little more than can be realized in the most conservative investments.

 

The average 403(b) annuity charges administrative costs of 2.11 percent of assets a year, according to Morningstar Inc., a financial research firm. By comparison, the average mutual fund has expenses of 1.36 percent. Many large mutual funds, such as those offered by the Vanguard Group, have expenses as low as 0.18 percent of assets each year. Compounded over the span of one's career, the difference in fees means serious money.

===============================================

ARE YOU STILL GOING TO STAND THERE AND ASSERT THAT YOUR AFT, BASED ON ITS SHARK ATTACK ARTICLE, ADVOCATES INVESTING WITH OPPORTUNITY PLUS/ING OVER NO-LOADS?

Yes. But don't take my word for it. Call the American Federation of Teachers itself. Let us know what they say, OK?

 

All I've done here is to point out that the Shark Attack singled out NYSUT (and a couple of other unions) as having done excellent work on behalf of its membership, forcing positive changes and reducing expenses. Since you seemed to think this was a typo of some kind, I enumerated some of the many positive changes that the Shark Attack author probably had in mind when praising NYSUT. The passage of the article that you cite above is further evidence in favor of what I have saying, since it lists some of the very kinds of fees that NYSUT's negotiations with ING have resulted in lowering.

 

So we have NYSUT, an AFT affiliate, endorsing ING...and we have an article written in an AFT publication, reminding us what excellent work NYSUT has done for its members in this regard. Your interpretation is that they really mean to AVOID ING?

 

Really...don't take my word for it. Call the AFT. I'm anxious to hear what they say.

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Guest Sierra

If you are so anxious maybe you should be the one to call and report back to us. Better yet ask one of your students to read the article and then ask him/her to tell you if the article advocates a 2 percent plan or no-loads?

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If you are so anxious maybe you should be the one to call and report back to us. Better yet ask one of your students to read the article and then ask him/her to tell you if the article advocates a 2 percent plan or no-loads?

 

Joel, there's nothing to interpret here: the AFT specifically endorses ING. If you don't believe me, and the simple eloquence of this article eludes you, read this, wherein Steve Schullo will verify that he was on an AFT task force that selected ING:

 

http://bwise.ibforums.com/index.php?act=ST&f=2&t=618

 

Like you, he disagrees with the decision, but unlike you, he at least acknowledges it!!!

 

 

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Guest Sierra

Apparently we are skipping over each other. AFT has never endorsed your Opportunity Plus/ING. The AFT affiliate known as NYSUT has endorsed this product. Now let's go to the Shark Attack article written by the AFT. No one who is reasonable would come to the conclusion that this article advocates/endorses a 2 percent plan rather than investing in no-loads.

 

I will be the first to say the ING has been officially endorsed by AFT and NYSUT. But that official endorsement is in direct conflict with the points enumerated in the Shark Attack article. This is why I say the guys/gals at the AFT responsible for the publishing of the article did not confer with the people at NYSUT which had in place a 2 percent plan (Opportunity Plus) for more than a decade prior to the article being published. Additionally, the AFT official endorsement of ING came after the publishing of the article which clearly advocates no load investing rather than using a 2 percent plan. There seems to be a lack of coordination between those at the AFT responsible for the newspaper articles with the people responsible for endorsements of products. If I were a member of AFT/ING I would be quite embarassed to say the least.

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I will be the first to say the ING has been officially endorsed by AFT and NYSUT. But that official endorsement is in direct conflict with the points enumerated in the Shark Attack article. This is why I say the guys/gals at the AFT responsible for the publishing of the article did not confer with the people at NYSUT which had in place a 2 percent plan (Opportunity Plus) for more than a decade prior to the article being published. Additionally, the AFT official endorsement of ING came after the publishing of the article which clearly advocates no load investing rather than using a 2 percent plan. There seems to be a lack of coordination between those at the AFT responsible for the newspaper articles with the people responsible for endorsements of products. If I were a member of AFT/ING I would be quite embarassed to say the least.

 

So just so I'm clear, this is the sequence of events:

 

1.) NYSUT, an AFT affiliate, endorses ING.

 

2.) The AFT publishes the "Shark Attack" article, praising NYSUT specifically for its work on behalf of members in the 403b arena.

 

3.) The AFT endorses ING.

 

4.) Joel insists that the AFT really wants us all to use no-loads.

 

It's a shame I'm the only one awake to appreciate this comedy. It's analogous to concluding, after looking at all the evidence, that the Pope is actually in favor of birth control.

 

Whatever. Good night.

 

 

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Guest Sierra

No you got it wrong. The author of the AFT article wants you to use no-loads (and still does) while his boss (former boss) the AFT wants you to use the 2 percent ING. Because of all the flack the AFT wishes it never published the article in the first place. C'mon now this is not brain science.

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No you got it wrong. The author of the AFT article wants you to use no-loads (and still does) while his boss (former boss) the AFT wants you to use the 2 percent ING. Because of all the flack the AFT wishes it never published the article in the first place. C'mon now this is not brain science.

No, it's not brain science, but the way in which you attempt to spin this is insulting.

 

The article is very clear: many 403(b) accounts have fees that are too high. Some unions have done wonderful things on behalf of their members to improve the choices available to them and to lower the expenses. NYSUT is specifically mentioned in this context. I have already enumerated the many ways in which NYSUT's negotiations with ING have resulted in lower fees. The article could not be clearer.

 

You're assuming facts not in evidence, especially in citing "all the flack." Yeah...the AFT got so much flack from this article, that they THEN went and endorsed ING AGAIN!!! Or does the second ING endorsement also fall under the category of things that you simply don't believe occurred?

 

The AFT's position on ING is crystal clear, and has NO element of doubt: they have endorsed them at every possible opportunity.

 

You are simply making this up as you go along.

 

 

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