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tnewin

457 Mass Mutual

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Hello, 

Mass Mutual is the only vendor that offers a 457 though my district.   In order to open an account with Mass Mutual, I need to meet with one of their advisors. What questions should I ask? How do I find out about fees and expense ratios for their products? If Mass Mutual has high fees, how do I petition my school district to add more vendors and which vendors should I suggest and why?   Sorry if these questions are elementary.  I'm new to this whole finance thing and It's like a foreign language to me. 

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tnewin, welcome to the forum. Sorry for the delay in getting a reply to your questions. I'm traveling in Canada with only rare wifi. I suggest you ask further questions on the 403bwise forum, as this 457 forum doesn't get near as much attention. Folks on both forums that have experienced what you are dealing with.

The first thing you should be aware of is that 457 plans (like 403b plans) can be either annuity based or mutual fund based. You should avoid the much more expensive annuity products. On MM's fees and ERs, you'll have to dig it out from the rep. He should refer you to online verification of the fees. I would strongly recommend that you do not sign up for anything at the meeting with the advisor. Just get information. Are you contributing to a 403b and maxing it? If not, that would be a good idea before using an expensive 457. Are there low-cost vendors for the 403b? Adding a 457 vendor usually involves talking the HR office and any third party administrator.

What state are you in? About half the states have state-run low-cost 457 plans that are available to school district employees. If your state does have such a 457 plan, it's often relatively easy to get it added to the vendor list. 

Any questions are welcome! We all started at an elementary level and most of us have lost a lot of money in the process of investing. Most of us are teachers, retired teachers or teachers' spouses.  

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Thank you for your response krow36. I'm located in California.  I have the bulk of my  AXA which I opened 15 years ago and two years ago I opened up an account with Vanguard. (I have tons of questions about AXA and consolidating my 403b plans which I will ask in the 403b forum soon.)   I don't max out on my 403b, but the 457 plan was appealing to me as if I end my employment with my district, I can withdraw money and pay taxes on the withdrawal while avoiding the 10% penalty.  I'm hoping to reach retirement age before I withdraw from my retirement accounts,  however, two of my brothers passed before the age of 40 and I want to be able to access my money penalty-free if I ever need to. 

Mass Mutual offers mutual funds or Investment Advisory Services. I've heard of mutual funds but I don't know what Investment Advisory Services are.  I asked my payroll manager about having other vendors added to the list of 457b plans and was told that it was not possible. 

Thank you for your help and safe travels. 

 

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I have WiFi for only a few minutes. You need to ck into the 403bwise forum. CA teachers have access to 457 plan run by your pension plan, CalSTRS. They may be on your 403b vendor list. Don’t accept a not possible. It IS possible if you keep pushing. TALK TO THE FOLKS ON THE 493b FORUM!!  Your reasons for liking the 457 are valid. 

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I have another few minutes of wifi. If you can find another district employee that will ask for the low cost CalSTRS 457 option that would help get it added. Also, ask to talk to someone higher up. Be nice, but keep at it.

It is very reasonable that the district employees should be able to contribute to a mutual fund based 457, not just an expensive annuity based 457. You may have to educate them about this. 

I think it’s likely that you would be ahead by moving your AXA 403b balance to your Vanguard 403b. Even if there’s a surrender fee. If you are likely paying 2% or more per year, you might be ahead by paying the surrender fee. 

Are you familiar with the 403b.compare.com website? It is also run by CalSTRS. All venders are required to list all the fees of their 403b plans. Check to to see if the Met Life 403b offerings are similar to their 457 offerings. 

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AXA and Met Life may tell you that they offer mutual funds in their annuities. Their annuities usually have added high expense ratios, often over 1%, also an M&E fee of 1% and also an admin fee. 

You may avoid some of these fees by choosing a Fixed Annuity, but that earns a very low return, and isn’t invested in the stock or bond mkts.

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Krow36, 

Thank you for pointing me to the 403b discussion site.  My questions were answered and I'm making changes to my 403b plan.  Also, been reading through previous discussions and feel a bit more financially literate. 

Therese 

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Hi,   I am new here, so I hope I am posting correctly.

 Mass Mutual was the only 457b option for my Oregon school district. I couldn't actually find accurate fees and expenses so I made an appointment drove 30 minutes to get them. Worth it.

High  fees and multiple fees Mass mutual hidden away.

I am pushing my district to adopt low fee OGSP - Oregon Growth Saving plan.

It seems like 457 fees associated with OSGP are much lower than the 457 fees with the current and only Woodburn 457 provider, Mass Mutual. (  there seem to be MANY Mass Mutual fees and expenses in the 30 page agreement. I was able to get a a summary from Wayne Muller which I have attached.)
 
MASS Mutual - example  Large Cap Am Century Ultra
  • Invest Mgmt Fee 0.99%
  • 12b-1 Fee 0
  • Other Expense .02
  • Total Annual Underlying F.O.E fee = 0.97%
  • Mortality, Expense and Admin Charge= 1.25%
  • fee to CUSO Wayne Muller .35%
  • Total Fees and Charges 2.22% 1.98% to 2.65% a year for Mass Mutual 457   through Wayne Muller at Salem MAPs CUSO
 
vs
 
OSGP through Voya  fees 
Total admin fee = 0.12%
Investment fees  Stock index 0.040%, to 0.53%
 
total fees and charges OSGP = 0.16

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