Jump to content
EdLaFave

Website To Navigate And Reform Ocps (Fl) 403B/457B Plans.

Recommended Posts

My wife and I just setup her 403(b)/457(b) plan at OCPS (FL) and we found that nearly every plan charges fees that eat away most of the real investment returns. We setup a web site, educatorsfightingforfairness.wordpress.com, to accomplish two goals:

  1. Help OCPS employees navigate the 403(b)/457(b) plans and to offer our time (for free) to work with employees in person, phone, email, text, etc to assist them in any way possible.
  2. Try to organize OCPS employees to help us in our effort to reform the system so that all employees are automatically helped out.
I'd appreciate any feedback on our site and please spread the word to any OCPS (FL) employees you may know.


Thanks!

Share this post


Link to post
Share on other sites

EdLaFave

 

You did a great job on this. Good basic information written in easy to understand language on investing and choices available. Every school system should have something similar to this available to its employees based on its offerings instead of leaving them alone in the 403b/457b jungle. I think you have figured out at a young age that the NEA is not on the teachers side when it comes to investments and that getting their direct invest plan is difficult if impossible to get. Gee I wonder why. You also figured out that most advisors are just car salesmen trying to make a buck and don't have the teacher's interest in mind.

 

Thanks for sharing this. I wish I had thought of doing this for my school district before I retired.

 

Tony

Share this post


Link to post
Share on other sites

Steve and I suggested Ed ask this forum for ideas on spreading the word about his website and furthering his goal of 403b reform. See page 2 towards the bottom and page 3 of: https://www.bogleheads.org/forum/viewtopic.php?f=2&t=180418&start=50

Orange County School District is #10 in size in the nation so it seems likely there are employees of like mind to Ed. Any suggestions on how to connect and get organized?

Tony, the Security Benefit Direct Invest 403b plan has not been difficult for most posters to sign up with. Ed's wife is the worst case I've seen, and that was mainly due to his HR department, not the plan. The plan is designed to bypass the local SB reps, so no assistance should be expected there. If Fidelity or Vanguard or Aspire were on the vendor list, there would be no local rep either. Of course I agree that all the SB/NEA plans other than Direct Invest are a ripoff of teachers by both SB and NEA!

Share this post


Link to post
Share on other sites

Krow

 

If I remember From what I read most folks interested in direct invest have been redirected to higher cost alternatives. Where did I get that idea?

Share this post


Link to post
Share on other sites

The folks that have asked about Direct Invest were cautioned not to go to the local reps to sign up for Direct Invest. Just study the website, fill out the form, follow directions and send it in. That seemed to work. If they talked to the local rep, I’d expect them to be pitched a variable annuity.

There have been a few problems but most seem to be due to not following directions. One poster wanted SB Direct Invest but SB was not on the list and they finally gave up. One poster used the plan number of his old SB plan, not that of Direct Invest on the salary reduction form. One poster didn’t fill out the application form completely. That took time to get straightened out. Several posters have reported that the SB head office phone staff are not all informed about Direct Invest, some are. Several posters have said local reps didn’t know about it. I do recall one reporting that they were told by their HR office they couldn’t use Direct Invest even though SB was on the list. I don’t know how that turned out. I don’t think SB makes it difficult to sign up for Direct Invest.

I kept a log of Direct Invest users that I knew of for about a year, with a few notes of their posts. So far, about 11, and I probably missed some recently. Most but not all Direct Invest users I know about posted on the BH forum, so your sample on this forum may be different than mine which includes both forums.

Share this post


Link to post
Share on other sites

Ed, have you seen this document on a FL effort to reform the K-12 403b, back in 2007-08?

https://www.pcsb.org/cms/lib/FL01903687/.../History_of_the_IBC_Model_Plan.doc

Here’s an article about the IBC Model Plan: http://www.cbeducators.com/news_spring08.shtml

And a very long discussion on this forum of the Model Plan: http://board.403bwise.com/index.php?showtopic=2988

I wonder how this fits in with Orange County School District's present 403b plan? Have you been able to look at their present 403b plan?

Share this post


Link to post
Share on other sites

I believe it is a great website with simple suggestions so that people will not go wrong.

 

Surely, the 403b is much better, that and a teacher's own Roth-IRA should work for most participants!

Share this post


Link to post
Share on other sites
Thanks for the feedback everybody! Keep it coming please, I'm hoping to fix any warts I'm too close to see.


Tony, I actually don't know much about NEA. I understand there is a fair amount of resentment towards them for associating with Security Benefit and perhaps for other less than stellar actions in the past. However, in my personal experience I view NEA as a godsend because they're the only reason my wife and I are able to invest a 403(b) with a total cost of roughly 0.08%...hard to be mad about that.


As far as our personal experience with being "allowed" to use DirectInvest it was pretty much a nightmare on both sides. OCPS retirement services flat out refused to enroll us (until we found somebody else to tell them they had to)...but on top of that the 2-3 people I spoke to at Security Benefit (for many many hours) refused to acknowledge the existence of NEA Direct Invest and repeatedly tried to transfer me to an annuity sales rep.


Krow, that first link isn't loading for me but I'm somewhat familiar with the IBC and they have a direct relationship with OCPS's third party administrator TSA Consulting Group.


Honestly when I read about IBC I feel like I'm reading 1984's doublespeak. It is a "model" of what not to do. It cares about fees in the sense that 2-4% fees are great! They negotiate the best possible pricing, for financial institutions and reps! I don't know what existed before this but this whole program is objectively awful.


I spoke with an AXA rep just days ago who used the IBC as a sales pitch. He tells me that I can rest assured I'm getting incredibly low prices because the state and IBC put together an extensive thing to vet an incredibly number of vendors and low fees were a primary concern. He then goes on to tell me how low the 0.9% 'management' fee is, plus the expense ratios which he refused to divulge, and surrender fees as high as 6%...or course getting this information out of him was like pulling teeth. He then closes his pitch by reflecting on how great it is that these expenses are so low and he is really looking out for the investor because fees are important. The whole thing is crazy...the extra credibility he can gain by referencing the state and the IBC is a huge negative in my opinion.

Share this post


Link to post
Share on other sites

I get the same impression on IBC and the Model Plan. It looks like a scheme to the ratify using only the high-fee companies, mostly annuity-sellers. And amazingly, the majority of FL districts seem to have bought BS!

Using the TSA website, I looked at the public school districts A through D and out of the 15, the 6 have either Fidelity or Aspire. https://www.tsacg.com/individual/plan-sponsor/florida/duval-county-public-schools/

Alachua County Public Schools has Fidelity

Bradford County School District has Aspire

Brevard Public Schools has Aspire

Charlotte County Public Schools has Aspire

Citrus County Schools has Fidelity

Columbia County School District has Aspire

If you surveyed all the districts, the data might be helpful in convincing your committee to add either Fidelity or Aspire (or both!). Podcast #11 is on Aspire.

Share this post


Link to post
Share on other sites

That's a great idea! I've been frustrated trying to get Vanguard or Fidelity to respond to the RFP but knowing that Fidelity and Aspire and maybe others are in other districts proves it's possible. Thanks!

Share this post


Link to post
Share on other sites

Ed wrote,

“As far as our personal experience with being "allowed" to use DirectInvest it was pretty much a nightmare on both sides. OCPS retirement services flat out refused to enroll us (until we found somebody else to tell them they had to)...but on top of that the 2-3 people I spoke to at Security Benefit (for many many hours) refused to acknowledge the existence of NEA Direct Invest and repeatedly tried to transfer me to an annuity sales rep.

 

Ed, were the calls to Security Benefit to the number on the TPA’s provider list (785-438-3076)? Was that a local or a regional SB office? The SB Direct Invest website has a “Service Center for assistance” # (800-747-3942). I hope that wasn’t the number you called! Would you recommend that others not use the TPA provided number?

Share this post


Link to post
Share on other sites

I know for sure that at least some of my phone calls were through 800-888-2461. I also know I have the (785) 438-3076 number written down but can't say for sure if I used it.

 

If you have to call then I'm not sure what I'd recommend. I'd recommend not calling at all and following the instructions I laid out step by step at my website https://educatorsfightingforfairness.wordpress.com/set-up-your-403b457b

Share this post


Link to post
Share on other sites

Thanks for putting the details of your school board presentation in your blog, which is part of your website. https://educatorsfightingforfairness.wordpress.com/blog/ I’ve bookmarked it.

I’ve been trying to think of how you could find others in the Florida K-12 403b community who are interested in reform. Maybe the BH community would be a good place to start? Using the BH site Google search tool, I tried “403b, Florida” and found a number of threads started by FL BHers. Perhaps you could send them a PM with information on your website?

https://www.bogleheads.org/forum/viewtopic.php?t=124659, kiethandmissy

https://www.bogleheads.org/forum/viewtopic.php?t=142661, FredCouples

https://www.bogleheads.org/forum/viewtopic.php?t=4396, mptfan

https://www.bogleheads.org/forum/viewtopic.php?t=148089, alphabetsoup

https://www.bogleheads.org/forum/viewtopic.php?t=7779, jsbowen

https://www.bogleheads.org/forum/viewtopic.php?t=7718, CrazyQBall

https://www.bogleheads.org/forum/viewtopic.php?t=12691, gdetore

I realize that your primary goal is to reform the OCPS 403b/457 plans, but it might be helpful to have a group of like-minded FL teachers to help spread word? FL seems unique in having most of its districts organized under a single state-wide industry-based “Model Plan” and a single TPA.

Share this post


Link to post
Share on other sites

It’s interesting that the Hillsborough County Public Schools decided it should post the following warning after its “list of agents”:

While the School Board permits tax deferred salary deductions for these approved companies, it does not recommend or endorse any of these companies. The employee is solely responsible for determining if this program meets his/her needs and for selecting a company. The following is an excerpt from Florida Statutes, chapter 112.21(3): "The purchase of such tax shelter, annuity or other investment qualified under the United States Internal Revenue Code and not prohibited under the laws of this state for an employee shall impose no liability or responsibility whatsoever on the employing agency except to show that the payments have been remitted for which deducted.

Updated 3/3/2017"

http://www.tsacg.com/TSA/media/TSA/content-files/forms/2017-TSA-Vendor-and-Agent-List.pdf

 

The districts hire a Third Party Administrator to make sure they are in compliance with the many complex IRS regulations. I think the district does have other responsibilities, the fulfilling of which it hires the TPA. One of those responsibilities is the determination which vendors are on the list.

Hillsborough County Public School district serves Tampa and is the 8th largest in the US. The district's 403b provider list does not include either Aspire, Fidelity or Vanguard—that is, there are no low-cost mutual fund based 403b providers.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

×
×
  • Create New...