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detailgal

401keasy? Talking To Ing Rep- Help!

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TC and Vanguard are the ONLY non profit investment institutions offering 403b services in the country.

Steve,

 

Are you sure Vanguard is a true non-profit? Or do you mean that they are a Mutual Company?

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Anyone charging fees or willing to share [at anytime] in fees charged = Bad.

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It really depends on the kind of fee, Murph.

 

Consider the fee that your physician, attorney, or accountant charges you. You walk in, receive the service, pay the fee, and you are done.

 

Now compare that to front end loads. You pay a fee every single time that you purchase shares, even though your friendly adviser certainly does not meet with you and provide a service each time that you do so. Or, how about those wonderful 12b-1 fees? You pay the fee continuously. Year after year after year after year.

 

Now, if you are talking about fee-only planners, I'm with you. Nothing at all wrong with going to an adviser, receiving his advice, and paying a fee. There is absolutely, positively a need for this type of service, just as there is a need for services from physicians, attorneys, or accountants. A good fee-only planner deserves to charge a substantial fee for his/her services. I might add that a good fee-only planner will point out to his/her clients the virtues of low cost investing and steer clients away from surrender fees, loads, and 12b-1 fees. Yes, Murph, these fees, indeed, are bad.

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Guest Sierra

<!--QuoteBegin--FrenchTeacher+Mar 19 2005, 12:40 AM-->

QUOTE (FrenchTeacher @ Mar 19 2005, 12:40 AM)
<!--QuoteEBegin--> 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. <!--QuoteEnd-->
<!--QuoteEEnd-->

FrenchTeacher. The issue here is how much of a fool do you want to be? If I am going to be taken to the cleaners I rather do it with a firm that charges 5 bp for the ME fee (TIAA-CREF) than the 175 bp the ING levies on teachers in OHIO or the 125 or is it 100 bp ING charges you as a purchaser of their "Opportunity Plus" VA. Moreover why does TIAA-CREF charge the same 5 bp regardless of where you work while sharks like your ING charge what ever they think the market will bear or what they can negotiate with an employee group like your NY State United Teachers.

 

"Peace and Hope" Joel L. Frank

With Offices in midtown Manhattan

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Joel, get over this old, tired argument. The issue is how a prospectus is a very difficult thing to read. TIAA-CREF does no better a job at this than anyone else.

 

I know you'd love to turn everything into a rant against ING, but that's not what ANYONE is talking about here.

 

I know you'd also love to believe that TIAA-CREF is superior to ING in every way, shape and form, but their prospectuses are no clearer to read for the average investor than anyone else's. And TIAA-CREF has some interesting conflicts of interest of their own, which other people have already mentioned...imagine my shock to not see you address them, but immediately to latch onto ING like some insane dog on a bone.

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Guest Sierra

To our FrenchTeacher, the Great Pretender,

 

In our democratic free enterprise system one will never be able to get a 100.0 clear reading on this topic. With all the financial accoounting standards and interpretations on how to carry out those standards as well as what those standards mean, it is like "finding a needle in a hay stack" and then attempting to interpret that "needle" if you find it. So as realists we must work with what IS disclosed and IS understood. If it is as difficult to understand a TC prospectus as an ING prospectus and knowing that there are hidden fees in both instances why would one like you want to give their business to ING and KNOWINGLY pay at leat 20x more for Mortality and Expense, a fee that is fully disclosed and understood?

 

Joel "midtown manhattan" Frank

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french, i assure you that by the end of all this discussion, mr "uptown" will certainly disclose to us once and for all that there was a 403b contingent behind the grassy knoll the day kennedy was s.

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french, i assure you that by the end of all this discussion, mr "uptown" will certainly disclose to us once and for all that there was a 403b contingent behind the grassy knoll the day kennedy was s.

Yes...but none of them were from TIAA-CREF, of course!

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All,

Interesting posts. There were 0 responses when I left for vacation 2 wks ago, so surprised to come back to what's here.

 

Re: Pathfinder's "understanding" of my post and intentions. Uh, wrong. I am one of 2 in my 28 employee agency who has read the prospectus. I am the only employee who has, over the past few years, tried to clearly understand, not only the plan, including costs, but my options for using and/or transferring from the plan. Because of my efforts, ING halved everyone's annual fees, back to the fees written into the original contract. (Took a "mere" six months for them to do it.) I am quite willing to work with admin in their communication with ING, but no, I do not take responsibility for admin's interest or decisions. My voiced concerns and questions did pique admin's interest, but their concerns and related pursuit of this is their own which, in many ways, parallel mine. "Finishing" what I started, does not mean speaking on behalf of admin or without a clear measure of their support. It does not mean doing the cfo's job. It can, and hopefully will, mean working in tandem with them, presenting information that will be useful both in their decision-making and in representing my concerns/interests and potentially those of the other 27 employee investors.

 

RE: prospectus language and education. Yes, employees should be responsible about their money. And, it is well known, to "advisors" and others, that most people glaze over when reading the prospectus, let alone hearing about investment options. "Advisors" can sell anything knowing that. Our ING rep did not once tell anyone about the m&e fee or her compensation. These are fees that affect returns, but they were omitted from the "education." I suggested a simple graph from ING to show all of the fees and costs. That was met with a loud silence (also known as a big cup of "shut up"). The doctor and pharmacist tell us the side-effects and what will lower the effectiveness of a . Why not the "advisor." Oh, I know, we might not buy what they are selling.

 

Thanks to Joe and others here for your continued assistance.

 

Detailgal

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Many 401k plans are not sold by prospectus. The offering documentation varies between vendors.

 

Since we are talking about an ERISA plan, the fiduciary has a legal obligation to minimize fees. However, there are many varieties of 401k products. Some are completely bundled and the provider does everything from recordkeeping to compliance. Some are unbundled where each function is served by a different party. Many are some in between.

 

Due to the machinations of the providers of the products, kickbacks(not in the illegal sense, at least I think) are paid along the way. In order for the fiduciary to make an informed decision, he needs to understand exactly what the fees are and how they compare vis a vis other products. This is the DOL's position, and there audits focus on it.

 

If you want to use a physician analogy, wouldn't it be important for you to know that the manufacturer of the he is prescribing is being paid $100,000 by the company to support their products?

 

Mark Fischer

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Mark,

 

Absolutely re: what I would call "fully informed consent." I now know, or think I know, what the various fees and costs are. I don't know exactly how the rep is paid, but I do know that when I asked for the info that I now have, she consistently sounded annoyed, like I was being awfully pesky.

 

What is "DOL?"

 

Thanks,

DG

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Detail,

 

It is the plan's right to demand disclosure of all the fees down to sub TA and recordkeeping fee sharing. In fact, the Department of Labor requires that the plan evaluate the fees down to this level. Further, a fairly high level DOL employee told me that trustees should shop their plans every two to three years.

 

Unlike 403b's(because the IRS doesn't care), ERISA plans (because the DOL does care) need to be very aware of fees and keep them as low as possible.

 

Mark

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Thanks!

 

I'm not up on the abbreviations...What is "sub TA?" And could you say more about "record keeping fee sharing?"

 

Thanks again.

 

DetailGal

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Mutual funds will kick back fees(not illegal most of the time) to 401k providers. Sub TA, stands for sub transfer agent. In theory, the plan record keeper is doing the accounting for the individual participants, therefore the fund companies can share some of their accounting expenses. In truth, they are just ways to get money to the sales organization without anyone knowing.

 

Mark

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