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krow36

403Bcompare Problems?

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I think 403bcompare is one of the biggest improvements in the Wild West of the K-12 403b world! In the past I’ve assumed that the data on the 403bcompare website is accurate. The new, revised website has a number of entries that make me wonder if vendors are making errors on expense ratios? Or are the errors on 403bcompare’s part, due to the recent big revision? In some cases, maybe I’m wrong in thinking there’s an error, and maybe some vendors are reducing some ERs?

 

USAA lists their 4 Target Retirement funds as having ERs of 0.03% to 0.05%, while those same funds, by ticker, at M* have ER’s of about 0.81%. USAA lists no annual fees. Is this too good to be true?

Does AXA’s EQUI-VEST Mutual Fund Program actually offer all the Target Retirement T. Rowe Price Retirement 20XX Advisor funds with an ER of 0.25%? TRPrice and M* both list those funds by ticker with an ER of 0.72%. They have a Mgmt/Wrap fee of $7.50/Q ($30/yr) and a Custodial fee of 0.06%/Q (0.24%/yr). Has AXA always offered a TRPrice TR fund with a total fee of 0.49% plus $30/yr in their MF based 403b?

Several vendors have Target Retirement funds with ERs listed as 0%. This includes Fidelity and Vanguard. Also Lincoln Investment Solutions Premier’s Vanguard TR and LifeStrategy funds have ERs of 0%. It’s obvious that TIAA’s entry is incomplete because ALL their funds have an ER of 0.0%!? What’s going on??

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Yeah, does smell fishy. I noticed that some insurance companies have no commissions but they charge surrender fees, or it might have been the other way around. But, no way. Commissions and surrender fees work together.

CalSTRS lurks this board so hopefully, they will get to the bottom of your findings.

 

Scotty? Can you comment?

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Yeah, does smell fishy. I noticed that some insurance companies have no commissions but they charge surrender fees, or it might have been the other way around. But, no way. Commissions and surrender fees work together.

CalSTRS lurks this board so hopefully, they will get to the bottom of your findings.

 

Scotty? Can you comment?

 

 

I am certainly not with CalSTRS. However, I did notice the 0.00 ER on Target Date Funds a few weeks back. I wrote 403bcompare customer service, and they told me it was an error.

 

They blamed it on Morningstar and that they would forward my findings.

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I just noticed that TIAA is listed as “Discontinued”, so I guess they no longer offer a generic 403b plan to K-12 districts? In CA at least? They don’t seem to be on any district list that I’ve seen in the last year or so.

https://www.403bcompare.com/vendors/1023#/productlist

 

I noticed that too. I wonder once Pension2 and the LAUSD 457b dropped them, they decided to leave the space altogether?

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I just noticed that TIAA is listed as “Discontinued”, so I guess they no longer offer a generic 403b plan to K-12 districts? In CA at least? They don’t seem to be on any district list that I’ve seen in the last year or so.

https://www.403bcompare.com/vendors/1023#/productlist

 

I noticed that too. I wonder once Pension2 and the LAUSD 457b dropped them, they decided to leave the space altogether?

 

 

TIAA never understood the public K12 space. They messed up with an anti-pension "research" paper they released back in 2012 when the co-author was from one of the most anti-union, anti-pension, right-wing organizations in the country. But even though CalSTRS and our committee were extremely angry at them, I still liked them, then and now (I put some of my fixed account allocation back into their Traditional Annuity for the 3.0% return, and principal guarantee). TIAA was lackluster in their work and that's why they were not selected. With LAUSD 457b plan, I was told they did not apply, and that's why VOYA got the contract. That research paper did not help them, but you might be right saab and krow, they decided to leave k-12 space before Pension2 and LAUSD renewals.

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I think there’s a mistake on the AXA variable annuity entry on 403bcompare.com.

The EQUI-VEST Series 201 on 403bcompare.com indicates a Personal Benefit Income Charge of 1%, but does not list an M&E charge or a Separate Account Charge as AXA calls it.

The AXA EQUI-VEST Series 201 website indicates a Personal Benefit Income Charge of 1% if it is elected. The website does indicate a non-optional Separate Account Charge of 1.20% which is made up of an M&E charge of 0.95% and an “other expenses” fee of 0.25%. http://www.cri4.com/crcl/fesco/AnnuityUpdates/Product%20Updates/Equivest%20403%20b.pdf

This oversight might cause someone to end up with the optional Personal Benefit Income Charge of 1%. They would of course be charged the Separate Account Charge of 1.25%. This would add to the 1.81% ER of the EQ/Equity 500 Index subaccount and result total fees over 4% for that subaccount. Other subaccounts would be even more!

I’ll try sending this post to 403bcompare.com and see what happens.

EDIT: I've just noticed that M* lists the EQ/Equity 500 Index subaccount with an ER of 0.61%. So 403bcompare has included the Separate Account Charge (M&E plus) into the listed ER. What do you think? Sneaky?

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I apologize for my previous post—it’s sure is confused. I’ll try again.

Assume someone is trying to find out the fees of AXA’s EQ/Equity 500 Index subaccount:

403bcompare:

ER of 1.81%

Personal Benefit Income Charge, 1%

AXA’s website on the EQUI-VEST Series 201:

ERs of subaccounts not included

Separate Account Charge of 1.20% (M&E 0.95% + other expenses 0.25%)

Personal Benefit Income Charge of 1% is optional

Morningstar:

ER of 0.61%

403bcompare should clearly indicate that the Personal Benefit Income Charge of 1% is optional. Also wouldn’t it be better to list the Separate Account Charge and it’s parts rather than including it in the ER?

Even though we all intensely dislike AXA’s variable annuity, 403bcompare should get its information correct and complete.

EDIT: I guess the ER on 403bcompare includes the Separate Account Charge of 1.20% for a total fee of 1.81%.

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I am certainly not with CalSTRS. However, I did notice the 0.00 ER on Target Date Funds a few weeks back. I wrote 403bcompare customer service, and they told me it was an error.

 

They blamed it on Morningstar and that they would forward my findings.

 

Shouldn't the vendor not M* be responsible for the accuracy of the fees in 403bcompare? Wasn't that the case before the recent revision? If the vendor can say "Sorry, M* got it wrong, that ER is 1.25% not 0.25%", then the value of 403compare is greatly reduced.

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The USAA Target Retirement fund’s ERs have been corrected and now range from 0.71% to 0.88%.

The AXA’s EQUI-VEST Mutual Fund Program is now listed as “Discontinued”. However the TRPrice Target Retirement 20XX funds now have ERs of 0.8l% to 1.01%.

The Vanguard and Fidelity Target Retirement funds now all have their correct ERs.

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