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Choice Of 403 B's

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So all you need to do is find a wife or partner with a defined pension and you are good to go. You are lucky having Fidelity Index funds. I would not hesitate following Krow's recommendations or mine for that matter.

 

Krow,

 

I can understand why you bailed after 16 years. I am still in disbelief that I was able to go 30 working in a high school setting.

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Tony & krow36,

 

Thank you for all your help with this. Good news: I'm going to be presenting my findings and research to the school union. The superindendent of schools has even expressed interest in what I've been doing. Turns out, he too has an AXA 403 b. My next mission is to have part of the new teacher orientation involve some training/discussions about the pitfalls of insurance companies selling us high priced annuities, and spread the word to teachers already stuck in these sub-optimal plans. Out of 124 teachers enrolled in a 403b plan, 75 of them have AXA. Unfortunately, I only know the numbers and not the names of those enrolled with AXA. While I know generally what I want to say and present, I was hoping I could ask the discussion board for some suggested talking points they think might be useful. Thanks in advance.

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Maybe I’d focus on the folks with an account with AXA. It would be a useful example for others as well. According to 403bcompare.com, AXA has both an an annuity-based 403b and a mutual fund-based 403b. Since most K-12 403b contributors do not know what their plan’s fees are, showing them how to look them up on 403bcompare.com would be very valuable to them. It seems that a lot of folks don’t even know the title of their plan, which they need to be able to look it up!? Maybe ask them to bring the title to your meeting? I realize that 403bcompare doesn’t have all the providers on the list, but the ones it does have are probably representative. Digging out the fee numbers on the others will probably have to involve the reps and maybe the actual plan and fund/subaccount prospectuses.

The AXA EQUI-VEST Series 201 (Roth Eligible) is a variable annuity product with the following fees:

Personal Income Benefit Charge, 1.00%

Administrative Fee, $30 per year

5% Surrender Fee, for 6 years

Individual subaccount fees, for example:

EQ/Equity 500 Index, 1.82%

EQ/Common Stock Index, (Russell 3000 Index) 1.92%

TOTAL FEES FOR A BASIC LARGE CAP BLEND FUND: about 2.82%

The AXA EQUI-PATH Mutual Fund Program

Management/Wrap Fee, $7.50 per quarter = $30 per year

Custodial Fee, 0.06% per quarter = 0.24%

Individual mutual fund fees, for example:

T Rowe Price Equity Income Adv, ER 0.93%

American Funds Invest Company of American R4, (large cap blend), ER 0.65%

TOTAL FEES FOR A BASIC LARGE CAP BLEND FUND: about 0.90%

The Fidelity Direct 403b

Custodial Fee, $24 per year

Individual mutual fund fees, for example:

500 Index Fund, Premium class, ER = 0.07%

Extended Market Index fund, Premium class, ER = 0.07%

TOTAL FEES FOR A BASIC LARGE CAP BLEND FUND: 0.07%

For a basic large cap blend fund, Axa’s variable annuity plan charges 3 times as much as their mutual fund plan, and 40 times as much as Fidelity mutual fund plan charges!! Axa’s mutual fund plan is over 12 times as expensive as Fidelity’s mutual fund plan!

​I'm assuming that before doing comparisons like those above, you've discussed why fees make a difference. It's really great that you're trying to help your colleagues! Good luck!

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