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ClarkandAddison

NEA Direct Invest for non NEA Member?

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I am wanting to know if you have to be an NEA member to be eligible for the NEA Direct Invest with Security Benefit?  Security Benefit is one of the three approved vendors for our school corporation (along with Horace Mann and Lincoln Financial), but I am not an NEA member.

As well as looking into the NEA Direct Invest option I am attempting to get Fidelity added as an approved vendor for our school corporation.  Hopefully I can make this happen as I don't necessarily trust Security Benefit or the NEA.  There are currently no NEA Direct Invest users in our school corporation, which is part of why I have decided to try and get Fidelity added as a vendor.  I figure it's going to take some work either way so I might as well shoot for Fidelity and hopefully have SB NEA Direct Invest as a backup if needed.

Thanks for any information.

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1 hour ago, ClarkandAddison said:

if you have to be an NEA member to be eligible for the NEA Direct Invest with Security Benefit? 

You do not have to be a member. .You have nothing to fear using Direct Invest. It's an above board option. It can be trusted. The only non above board thing is they won't openly advertise it. You pretty much have to discover it yourself as you obviously did. Spread the word by word of mouth and stay away from a Security Benefit advisor/salesperson/sales shark. Once you recruit them for any help, bad things can happen as they are on commission and will try to sell you higher priced subpar goods. NEA Direct Invest must be a 100% do it yourself option. We can help with the process if questions arise.

If you can get Fidelity on board GREAT!! BUT you must stick to their index funds otherwise they have many higher cost managed funds in their choices. Their index fund choices are limited. Fidelity is a for profit company. Vanguard is not for profit as an example and has lower costs across the board. But Fidelity has a better expense ratio on their index funds but not by much. Fidelity introduced index funds to compete with Vanguard.

 

Tony

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Thanks for the information Tony.  If I can't get Fidelity added, I'm going to work on joining NEA Direct Invest.

I would be fine with Vanguard being added to our vendor list, but from what I've been told by someone who went through the process of trying to add Vanguard to his school district's list, Vanguard was going to cost the district and Fidelity wasn't, so he ended up getting Fidelity added as a vendor.  If I am successful at getting Fidelity added, I'll definitely take your advice and only invest in the index funds as that's what we use for our IRA's (Vanguard) and my wife's 401k and my HSA (both at Fidelity).

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ClarkandAddison, welcome to the forum! I agree with Tony that being a member of NEA, or working for a district that bargains with a NEA union, is irrelevant to being able to use Security Benefit's NEA Direct Invest. I would stick with the Vanguard funds in NEA DI because the others are more expensive actively-managed funds. You can find a discussion of the Vanguard funds in msucurt's thread. Good luck with getting Fidelity added to the 403b vendor list. 

Do you have a 457b vendor list? What state are you it?

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krow36,

Thanks for the information.  I'm waiting to hear back from Fidelity on information that I can take to our central office in an attempt to get Fidelity added as a vendor. 

I am in my 16th year teaching and have always just put a little into my 403b because of the perceived poor options (before looking into NEA DI).  As a family, we have finally gotten to the point where we can max two Roth IRA's, an HSA, and a 401k, which is why I'm now looking to increase my 403b contributions.  I've been following the Boglehead investing philosophy for years and will definitely be sticking with low cost index funds (like in msucurt's thread) regardless of whether it is with NEA DI or Fidelity.

I teach in Indiana and do not have a 457b available that I know of.

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On 11/9/2020 at 11:31 AM, ClarkandAddison said:

you have to be an NEA member to be eligible for the NEA Direct Invest with Security Benefit?

Krow and Tony are correct, you do not have to be a member.

On 11/9/2020 at 11:31 AM, ClarkandAddison said:

looking into the NEA Direct Invest option

I enrolled my ex-wife in the plan and documented everything you need to know about it here.

On 11/9/2020 at 2:07 PM, ClarkandAddison said:

If I can't get Fidelity added, I'm going to work on joining NEA Direct Invest.

I added Fidelity and Vanguard to Orange County's (FL) list of approved vendors. It took a very long time. If I were in your shoes, I wouldn't allow unused tax advantaged space to expire (2020 is almost over) because you're waiting to add a marginally better plan. You know your situation better than I do though.

 

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Thanks Ed.  I think I'll probably end up with NEA DI.  I've not been able to get anyone at Fidelity's 403b sales department to return my calls.  Thank you for sharing your experience.  I'll report back with my progress.

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Few more questions.

Background--My 401a is currently with Security Benefits.  Our school corporation pays a 1% match into the 401a and that money has to go to Security Benefit, we don't get a choice where this goes.  Not a huge deal as it is a small amount of money.  My current 403b is with Horace Mann and in a traditional 403b (as opposed to a Roth 403b).

1--If I open the NEA DI 403b, will I be able to rollover my current 403b to NEA DI as a traditional 403b even if I open the NEA DI 403b as a Roth?

2-- If I can roll my current 403b to NEA DI, will I be able to see both accounts (the traditional rollover and the new Roth 403b) from the same login page?

3--I assume this would be no, but would my 401a with Security Benefit be visible from the same login as my new 403b that I'd like to set up?

 

Thanks for any help.

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10 hours ago, ClarkandAddison said:

I've not been able to get anyone at Fidelity's 403b sales department to return my calls

When I went through this process 2.5 years ago:

  • I spoke to somebody named Holly at Fidelity, 1800-868-1023
  • I spoke to somebody named James Rollar at Vanguard, 1-800-992-7188 extension 29884, James_Rollar@smallbiz.vanguard.com

You'll need to know what process your district goes through to add vendors.

 

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Thanks for the contact info Ed.  I actually got a response when using the Fidelity number you listed.  I was told we would need at least 10 participants and at least $1,000,000 of assets transferred to Fidelity for them to be willing to be one of our 403b vendors.  We are a small school corporation and I think I could probably come up with 10 participants (it would take some work to convince even 10), but I don't think I could get 10 convinced that have a total of $1M invested to transfer to Fidelity.  Looks like it's on to NEA DI.

 

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I'd maybe talk to somebody else at Fidelity. They never once told me about such a requirement. Of course OCPS (FL) is a large district. Still, it is common place for people in this industry to say incorrect things with absolute confidence.

Also, I know you have an eye toward Fidelity, but don't forget about Vanguard. They'd be a huge benefit to your fellow coworkers.

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3 hours ago, ClarkandAddison said:

Few more questions.

Background--My 401a is currently with Security Benefits.  Our school corporation pays a 1% match into the 401a and that money has to go to Security Benefit, we don't get a choice where this goes.  Not a huge deal as it is a small amount of money.  My current 403b is with Horace Mann and in a traditional 403b (as opposed to a Roth 403b).

1--If I open the NEA DI 403b, will I be able to rollover my current 403b to NEA DI as a traditional 403b even if I open the NEA DI 403b as a Roth?

2-- If I can roll my current 403b to NEA DI, will I be able to see both accounts (the traditional rollover and the new Roth 403b) from the same login page?

3--I assume this would be no, but would my 401a with Security Benefit be visible from the same login as my new 403b that I'd like to set up?

 

Thanks for any help.

A previous poster some years ago had a match with a Security Benefit 401a and was able to switch his match contribution from SFR? to NEA Direct Invest. The employer contribution continued to go to the 401a using SFR. 

After your NEA Direct Invest is set up, you will be able to work on transferring your HM 403b balance to the NEA Direct Invest account. HM requires you do this using their transfer form. The transfer will terminate the HM 403b, unless you choose to do a partial transfer. You will probably have a surrender fee which the HM 800 number can tell you about. Because of the high fees of a variable annuity (2% or more), it often makes sense to pay the surrender fee and invest the money in a vender's low-cost 403b (0.1% or less).

 

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I talked to another person at Fidelity today (they finally returned my message).  This one didn't mention anything about having to have at least 10 members and  $1M transferable assets for Fidelity to be interested.  This guy said at this time Fidelity is not interested in being added as another choice for our 403b list.  He said if we were able to get Fidelity as the only vendor for our 403b, then they'd be interested.  I'm thinking that it's just not worth it to them to bother with our small corporation.

From another teacher in a neighboring state that I talked to that went through this process a few years ago, Vanguard was going to be more expensive for his school district, which is why I had been focusing more on Fidelity than Vanguard.  

Looks like my best bet is to go through the trouble of trying to be the first person in our corporation to use NEA DI.  

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6 minutes ago, EdLaFave said:

What is a school corporation?

In Indiana,  most public schools are part of school corporations instead of school districts.  Not sure if there is a difference other than the name. 

 

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