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detailgal

401keasy? Talking To Ing Rep- Help!

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Hello!

 

1) Does anyone on here use 401keasy? Sounds interesting to me.

 

 

2) Our ING rep is coming to meet with the cfo, the exec dir and me in April. In response to my interest and complaints (cited on posts here), the cfo thought we should look for a new plan and told the ING rep. CFO says that our contract was drawn up poorly, with a 15k penalty should we leave the plan in under 10 years. (My thought is to freeze it, avoid the 15k and allow 90-24 transfers only to the new plan and no other.) THe rep wants to hear our concerns...and the cfo wants her to come up with something more to our liking.

 

Here's where I need your help. I'm nervous because the exec dir and cfo are treating me like I'm the expert and want me to articulate to the rep what it is we don't like about the annuity-wrapped ING plan. Now, I can speak to my principles with regard to my investments and what spurred my interest in leaving the plan (or transferring), but, as I told the cfo, I don't want to be the main representative for the agency. I will reiterate this to them and what I would hope they would consider in this conversation. I'm concerned because I can't point to specific returns that are horrible from ING vs the market or Vanguard. (The cfo asked me to come up with a chart showing those types of comparisons.) I can mostly state my interest in having a plan whose costs will have the least chance of lowering my returns. Is this enough?

I'm glad that the admin has chosen to listen to my concerns. I just don't want to be hanging my ___ out; I want them to know what they're talking about and not expect me to be the "voice" of the agency's concerns.

 

Would love feedback.

DG

 

p.s. the current plan has 1.25% fee added to every fund fee. Lowest fund fees are around 60%

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Hi,

I don't know anything about your first question, but you might do something like Dan has done in this POST for your second concern. If you know your cost for ING, then you could compare them to Vanguard similar to Dan's post. I hope this helps. Best Wishes.

 

Joe

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deatil gal, looks like you started something you dont want to finish. if you are not the expert, then leave it up to the experts on your investing. you see, you want it done for you but you want it done for free. typical, very typical!

 

best of luck

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detailgal,

 

ING is very expensive. The one of the topics in the 401k market is full disclosure regarding fees. Plans are hiring firms to conduct audits to determine the true cost of the plan. The DOL is also focusing on fees. The problem is that the vendors hide the fees and they are not disclosed. You need to understand the game, to evaluate plans.

 

Whatever you do, get at least three or four bids on your plan. The DOL will want to see that you did your homework to select a good plan.

 

401keasy, nice marketing term. Again, ING is very expensive.

 

Mark Fischer

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how exactly are 401k's and 403b's hiding fees? are they not disclosed in the prospectus(es). if clients do not take the time to read ares that they are concerned with, how is it that it is the fund companies are at fault. example, you buy a car sight unseen, not knowing mileage, vehicle history, etc...then when it breaks down you are upset that the dealer would do such a thing.

 

seems like the same to me. bottom line, we americans are quickly to put blame and resposibility on others rather than taking it on ourselves. now the people in here are wiser than your average investor and have taken on this task, but should we start condemening everyone in the investment./commission world? I think not.

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pathfinder, I agree with this entirely. It's simply the latest example of the scapegoating society in which we live...something goes wrong, and nobody wants to look in the mirror to find the guilty party.

 

Having said that, it shouldn't be that difficult for the industry (if it so desired) to rewrite the prospectus into a shorter, more comprehensible, "plain English" document that emphasizes, rather than obfuscates, key information.

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Guest Sierra

Path,

 

It is a little more complicated than just reading the prospectus. Like Mark said some fees are hidden and thus not disclosed, period.

 

Q.: Does the $4,000,000 endorsement fee ING pays to the NY teachers' union come from fully disclosed fees, and if it does on a weighted average basis what percent of the total expense ratio is used to pay the endorsement fee. Or does the $4,000,000 come from hidden fees that the teacher has no knowledge of?

 

Peace and Hope,

Joel

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hhhmmmmmmmmmmmm, i guess when i am buying my carton of milk this weekend, rather than complain about the expiration date, i SHOULD be concerned with how much that milk would really be if i knew how much the total cost went to packaging, advertisments, that sticky paper thing on the front, the little blue cap (that costs me a nickel right there!), and of course the designers who make the little plastic handle a part of the jug. of course i am also leaving out the therapy that must be paid for for the cows under duress and the guys who clean up after the cows, but that's neither here nor there.

 

thanks sierra for making me look at the bigger picture in purchases. you just may find me shoving my 18 month old under the udder of a cow and tell him to "suck boy"...daddy needs to get around these ridiculous, high priced additives that add to the cost.

 

you are saving me at least $6 a week...how can i repay you?!?!?!?

 

 

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Pathfinder,

 

I agree with you that investors should take on some due diligence themselves. But, come on. The language that companies use is not exactly user friendly, is it? Just try to sort through the legalese. I know, I've tried.

 

I'm not one to join the victimization chorus that plagues society, but FT has it right: prospectuses should be written in "plain English." And if not, those wonderful agents among us should take some time to explain things to clients who depend upon them. I surely did not get that kind of explanation years ago, and when I tried to start up a 457 plan a couple of years ago, the omissions and obfuscation would have delighted any fan of the English language.

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Q.: Does the $4,000,000 endorsement fee ING pays to the NY teachers' union come from fully disclosed fees, and if it does on a weighted average basis what percent of the total expense ratio is used to pay the endorsement fee. Or does the $4,000,000 come from hidden fees that the teacher has no knowledge of?

You've cited the prospectus many, many times, Joel. Feel free to answer your own question.

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Guest Sierra

FT: The Prospectus does not disclose the portion of the expense ratio (in bp) that is used to pay the $4,000,000 endorsement due your teachers' union. Assume it is paid from the total expense ratio. Is it 1, 2, 4, 6 bp? This info is not disclosed. Now, if we assume it is not paid from the expense ratio then it must be paid from hidden fees.

 

"Peace and Hope"

Joel L. Frank

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I'm not at all sure why this matters, but assuming it does, I'm certainly willing to agree that ING's prospectus obfuscates and "hides" things at least as well as the prospectuses at TIAA-CREF, Fidelity, T. Rowe Price, etc. The issue here being how these firms choose to write their prospectuses, the simple fact is that no firm that I'm aware of has taken the lead in writing a legible one.

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I agree with all of you when in stating that the prospectuses need to be written better, but to ask firms/funds to incorporate into their prospectuses the amount they spend on advertising and testimonials would be absurd. Also, French brings up a good point. How many advertisements in magazines have we seen touting TC and the statements people make about them. I remember seeing at least 5 of them...sesame street, professors, educators, and many colleges. In the fne print, you will read that TC has made a donation/contribution to that persons' college or organization. With that being said, people in glass houses should not throw stones. TC should not be absent from any of these innane questions.

 

Unless they write it into their prospectuses. Do they TC lovers? show me!

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So, Pathfinder, we agree that prospectuses should be much clearer for all companies. And perhaps you are correct that it would be unrealistic for companies to specify every dollar that they pay for advertising. Can we also agree on the following, as well?

 

* Companies should not charge surrender fees.

* Companies should not charge ridiculous loads, be they front end, back end, or whatever else they can dream up these days.

* Companies should not charge 12b-1 fees that purport to be in the best interests of shareholders, but in fact rip them off.

 

I'm not aware of Fidelity, Vanguard, TC, or TRP charging any of the above fees. Can the companies that you recommend say the same?

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Furthermore Pathfinder,

Here we go again. The thrashing of TC and Vanguard continues…

Anyway, adding on to westerndad excellent and direct summary, TC and Vanguard are the ONLY non profit investment institutions offering 403b services in the country. Furthermore, TC's Equity Index follows the Russell 3000, minus companies that harm the environment, produce tobacco products, and weapons. We are lovers of these companies because they just happen to fit our ethical standards and they have a long and colorful history with over 5000 colleges and universities in the country. The rest of the 403b companies, including all other no loads, are all for profit companies. There is nothing unethical for TC and Vanguard to advertise. Because they advertise low fees, the results of this type of advertising is based on attraction rather than promotion or selling (And they are in FACT offering low fees and they have a foundation). That’s a big difference. We are attracted to these great companies because of their low fees and that’s a big difference in the amount of one’s eventual nestegg. It mostly boils down to this and its unfortunate that we have to say this again and again and again, FEES MATTER.

If you want to criticize TC, check out its new CEO who is from Wall Street. Consequently and unfortunately, there has been a lot of talk that he is trying to change TC's colorful history and make it more like the so called "dream machines" of Wall Street brokerages houses. This new CEO is very different than his predecessor, the legendary, John Biggs, who along with John Bogle, are my heroes. If this new CEO is successful and he has not been yet, I am out of TC and into Vanguard. But right now, TC is solid.

Best wishes,

Steve

 

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