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ChrisC

Changing our plans. Comparing Costs.

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I'm trying to get my school district to change. Our current plans and TPA are horrible. I have a meeting with our Superintendent coming up. I have his attention and I am hoping he will help me push the benefits department to get this done. I've been comparing costs making phone calls. I would love to hear what others have found. Here is what I have so far:

-Fidelity has a $24 maintenance fee per year.
-Fund expense ratios also apply (example: Fidelity's S&P Index Fund is .015%)
-$24 per year for the Third Party Administrator. This is the cheapest I have found that will work directly with Fidelity and Vanguard. The company is TSA Consulting.

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-Vanguard charges $60 per year for their fee and that includes record keeping from the Newport Group
-Fund expense ratios also apply (example: Vanguard offers their admiral share S&P Index Fund with .04% expense ratio with no minimum limit now for their 403b's)
-$24 per year for the Third Party Administrator. This is the cheapest I have found that will work directly with Fidelity and Vanguard. The company is TSA Consulting.

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I believe these are the only costs. Fidelity is a little cheaper. If anyone has info on any other lower cost options or advice please let me know. My first objective is to get them to change our plan. Down the road I have more Ideas. I would love to administer our own plan, but it may not be possible. I wondered if we could start an endowment to help pay for administration / employee fees.   

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I think I have a good grasp of what Fidelity and Vanguard offer. It's the TPA's that I am leery of. Does anyone have any experience with TSA consulting?

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The TPA that my district uses doesn't charge individual employees an annual fee, but I'm pretty sure the administration pays them something.  I don't totally trust their judgement, and I can't help but wonder if they are being partially compensated by the insurance companies that sell annuities.  The one time they came out and gave a presentation at my school they seemed to want to steer people towards the insurance companies.  They didn't want to talk about Vanguard at all and quickly changed the subject when I asked about them.

 

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Our benefits department director admitted to me that our district doesn't pay our current TPA anything. I asked her what fee does the employee pay and she had no idea. She admitted to me they have never negotiated that. That is what I am pushing for now and I am having to do all the legwork myself. I went about this process in reverse. I spoke with Fidelity and Vanguard first and then asked them who they work with directly. The rep at Fidelity gave me the name of a TPA. He also sent me a copy of their record keeping agreement between Fidelity and anyTPA they work with. It says the fee to the TPA is $24 per year and it's taken out of the participants account. I don't think Fidelity will sign any one else's agreement. They use their own and won't charge more than the $24. I think that is why some TPA's won't work with them. 

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