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arich

Help A Friend In Arizona

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I'm helping a young friend out who just graduated and got a job in Temple Arizona. She works for me during the summers in NY and I've been educating her on retirement investments.

She called me last night from a presentation with Voya at her school district. It appears that this is here only option. I found a few links:

http://www.tempeschools.org/home/showdocument?id=13640

http://www.tempeschools.org/our-district/departments/finance/tax-deferred-annuities-retirement-savings-plans

http://www.tempeschools.org/home/showdocument?id=81

 

This is what I am finding, and she says she can gain access to Vanguard Index Funds.

 

Contract charges • No annual maintenance fee • An annual asset based service fee of 0.30% will be assessed on all investment options, including Voya Fixed Plus Account III • Fund management fees and fund operating expenses will apply. Fees depend on the investment option chosen. Please refer to the individual Fund prospectuses for fund fee information. • No contract withdrawal charge – this allows full portability at separation from service or retirement (withdrawals from the 403(b) plan prior to age 59½ will be subject to an IRS 10% premature distribution penalty tax). This IRS premature distribution penalty tax does not apply to 457 plans.

 

 

Thoughts???

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Arich

 

Seems like she should be able to tap into low cost Fidelity and Vanguard index funds. I would go the index route as this help keep the cost lower . Still you will have to see what the final expense ratio is which is not clear since it will vary by fund.

 

 

  • No annual maintenance fee

  • An annual asset based service fee of 0.30% will be assessed on all investment options, including Voya Fixed Plus Account III

  • Fund management fees and fund operating expenses will apply. Fees depend on the investment option chosen. Please refer to the individual Fund prospectuses for fund fee information.

I do think that a .30% annual asset service fee is on the high side. In addition you have a fund management fee .I know Aspire only charges .15% and my Virginia 457 plan charges .19%.beyond the fund expense ratio as an administration fee . These fee names seem so confusing.The way I read this she has a possible management fee, a definite annual asset service fee, and the definite fund expense depending on fund she chooses. Since Voya seems to own the whole show and no other providers are available I would ask for total cost of owning the Vanguard Index funds they offer and see what the final cost comes out to be per fund. Then get back to us. I would take a good look at this to see if there are any other hidden fees involved. Also see if she can self direct her account, and opt out of working with an advisor. That might cut out one of those fees. I am not clear if the fund management fee is a Voya fee or if it is associated with the mutual fund chosen. It must be the later but you never know until you ask.

 

I really believe if she picks a Vanguard Target Fund and leaves it alone she really does not need the extra expense of an advisor since the fund is self managed. It would be a great starting point for her.

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Arich

 

Seems like she should be able to tap into low cost Fidelity and Vanguard index funds. I would go the index route as this help keep the cost lower . Still you will have to see what the final expense ratio is which is not clear since it will vary by fund.

 

 

  • No annual maintenance fee

  • An annual asset based service fee of 0.30% will be assessed on all investment options, including Voya Fixed Plus Account III

  • Fund management fees and fund operating expenses will apply. Fees depend on the investment option chosen. Please refer to the individual Fund prospectuses for fund fee information.

I do think that a .30% annual asset service fee is on the high side. In addition you have a fund management fee .I know Aspire only charges .15% and my Virginia 457 plan charges .19%.beyond the fund expense ratio as a management fee . The way I read this you have management fee, an annual asset service fee and the fund expense.? Since Voya seems to own the whole show and no other providers are available I would ask for total cost of owning Vanguard Index funds and see what the final cost comes out to be per fund. Then get back to us. I would take a good look at this to see if there are any other hidden fees involved. Also see if she can self direct her account, opt out of working with an advisor. That might cut out one of those fees. I am not clear if the fund management fee is a Voya fee or if it is associated with the mutual fund chosen.

 

I really believe if she picks a Vanguard target fund and leaves it alone she really does not need the extra expense of an advisor since the fund is self managed.

I totally agree. I gave her a list of questions to ask payroll today. It looks like Voya runs the show there.

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rich,

 

Payroll may not be the way to go. I would call Voya directly and get the info they give you in terms of final fees for funds chosen. Write it down. Wait a week. Call them again and ask the same question. See if the fee stays the same. Then ask for their prospectus or look for it online and see if what they tell you matches the info in the published information. Companies know that fees are their achilles heel. Its your job to make sure they are not playing fast and loose with the facts either because they are being deceptive or simply don't really know.

 

High fees have a lifelong consequence. Its not as harmless as it might seem by paying "just a little more". as an advisor once said to me.

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