Help
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
Rfp Offered In The Phoenix Area
#2
Posted 16 September 2007 - 04:09 PM
Econ Teaher;
As it is written, I would respectfully suggest that the RFP will draw bids from only the least attractive Vendor Offerings -those who just want to have access to the Teachers Lounge. And what you miss out on are those vendors who can & will want to help you to accomplish your objectives. Following are a Critical Few suggestions regarding what your procurement process should consider:
1. Vision with respect to Group Purchasing Power. WHAT IS IT?
Why are you doing this? What are you trying to accomplish? How Large is Your Group? How many current assets are available? Are those assets in play? Or just new contributions? How are you going to deal with what is already on the books? What is the vision for the plans over the next 5-10 years?
2. Lack of understanding of the Economics of Vendor Marketplace & how to attract the best vendor bids. WHAT DO YOU HAVE TO OFFER TO ATTRACT THE BEST VENDORS & BIDS?
To drive your Best Bargain and to attract the best bids, your group need to recognize that the Defined Contribution Plan Market is driven by Scale Economies. Per Capita Assets is Key. What are you offering? Your RFP is Silent here.
3. What Kind of Platform Architecture do you seek? ARE YOU A CAPTIVE OF THE STATUS QUO?
It sounds like your group is familiar with the typical multiple vendor environment that so may SD's have as legacy architectures. Do you intend to perpetuate this structure or go another direction? Have you really considered alternatives? Would an exculsive Vendor with an open investment architecture serve you better, why or why not?
Final Commentary: I think procurement professionals can add value to your process and clearly you have some of these on board. But you need to marry these resources up with your Plan Governance Structure/Committee. Is there a Committee? How does it work? Is it involved in the RFP Process? How? Is there an Investment Policy? If you have these - use them & if you do not, your RFP may be putting the Cart before the Horse.
There is much more to discuss but I am out of time for this post.
Cheers,
Danc
As it is written, I would respectfully suggest that the RFP will draw bids from only the least attractive Vendor Offerings -those who just want to have access to the Teachers Lounge. And what you miss out on are those vendors who can & will want to help you to accomplish your objectives. Following are a Critical Few suggestions regarding what your procurement process should consider:
1. Vision with respect to Group Purchasing Power. WHAT IS IT?
Why are you doing this? What are you trying to accomplish? How Large is Your Group? How many current assets are available? Are those assets in play? Or just new contributions? How are you going to deal with what is already on the books? What is the vision for the plans over the next 5-10 years?
2. Lack of understanding of the Economics of Vendor Marketplace & how to attract the best vendor bids. WHAT DO YOU HAVE TO OFFER TO ATTRACT THE BEST VENDORS & BIDS?
To drive your Best Bargain and to attract the best bids, your group need to recognize that the Defined Contribution Plan Market is driven by Scale Economies. Per Capita Assets is Key. What are you offering? Your RFP is Silent here.
3. What Kind of Platform Architecture do you seek? ARE YOU A CAPTIVE OF THE STATUS QUO?
It sounds like your group is familiar with the typical multiple vendor environment that so may SD's have as legacy architectures. Do you intend to perpetuate this structure or go another direction? Have you really considered alternatives? Would an exculsive Vendor with an open investment architecture serve you better, why or why not?
Final Commentary: I think procurement professionals can add value to your process and clearly you have some of these on board. But you need to marry these resources up with your Plan Governance Structure/Committee. Is there a Committee? How does it work? Is it involved in the RFP Process? How? Is there an Investment Policy? If you have these - use them & if you do not, your RFP may be putting the Cart before the Horse.
There is much more to discuss but I am out of time for this post.
Cheers,
Danc
#3
Posted 16 September 2007 - 07:22 PM
QUOTE(Econ Teacher @ Sep 14 2007, 09:18 PM) 
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP. The wrap account permits the participant to use a low cost provider fund without being at risk for mistakes by the SD.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
Danc:
If you had read the above initial post from Econ teacher you would had noticed that the reasons for lack of interest by low cost providers was because they did not want to pay to support plan admin or sign an indemnification agreement to reimburse the SD for their own errors. Open architecture or economies of scale will not entice them to offer their funds. Use of a low cost provider will require that the participant pay to support the cost of plan administration which will increase under the IRS regs.
#4
Posted 16 September 2007 - 08:03 PM
Intruder;
What is the point of your post?
I offered suggestions (my opinions) regarding the RFP. If your opinion is that these would not be helpful, please state so. If you have any constructive suggestions to offer, I'd like to hear them please.
My direct experience in the Vendor Search process is that purchasers do not have clear enough objectives when they start. They can get far better results if they are clear about what they are seeking, consistently drive toward their objectives, and marshall resources appropriately. Many purchasers lack an understanding of what to do to get the best deal for their plan & participants.
The Econ Teacher is looking for specific suggestions on how to improve their Procurement Process, what informed insights can you share on this topic? Thank you, in advance, for your wisdom.
Cheers,
Danc
What is the point of your post?
I offered suggestions (my opinions) regarding the RFP. If your opinion is that these would not be helpful, please state so. If you have any constructive suggestions to offer, I'd like to hear them please.
My direct experience in the Vendor Search process is that purchasers do not have clear enough objectives when they start. They can get far better results if they are clear about what they are seeking, consistently drive toward their objectives, and marshall resources appropriately. Many purchasers lack an understanding of what to do to get the best deal for their plan & participants.
The Econ Teacher is looking for specific suggestions on how to improve their Procurement Process, what informed insights can you share on this topic? Thank you, in advance, for your wisdom.
Cheers,
Danc
#5
Posted 16 September 2007 - 08:43 PM
Danc: The point of my post is that you continue to be oblivioius to the problem stated by Econ teracher: the low cost providers are not interested in bidding unless the SD drops the indemnification requirement and do not have to pay for plan admin. These requirements are deal breakers. The clarity of objective will only be important if the above two obstacles are removed which aint going to happen because the SD will not absorb any costs for the plan.
#6
Posted 18 September 2007 - 05:35 PM
Econ Teacher;
I am not aware of anything in the Regs that speaks to how the Consortium may or may not organize its service providers including the use of a TPA and contracting directly with mutual funds as you describe. A 403(b) Plan is required to use permissable investments (mutual funds and annuities).
My understanding from your initial post is that you were anticipating bids would come only from the usual Insurance Co./Annuity Vendors and that you had an interest in obtaining better bids from fund companies. You might want to be aware that Vanguard, Fidelity & other direct, no-load fund companies are not uniformly cooperative with all vendor search facilitators. And it may serve your consortium to evaluate this aspect of their RFP process as closely as the bidders themselves.
Regarding a Hold Harmless Agreement that you and Inruder have referred to as a potential deal-breaker (or at least an impediment to lower cost bidders) can you please paste it in your next post or give me a citation within the RFP.
Your Consortium brings value as an aggregator, and it is possible to measure & exchange aggregation value for plan administration expense offsets.
Cheers,
Danc
I am not aware of anything in the Regs that speaks to how the Consortium may or may not organize its service providers including the use of a TPA and contracting directly with mutual funds as you describe. A 403(b) Plan is required to use permissable investments (mutual funds and annuities).
My understanding from your initial post is that you were anticipating bids would come only from the usual Insurance Co./Annuity Vendors and that you had an interest in obtaining better bids from fund companies. You might want to be aware that Vanguard, Fidelity & other direct, no-load fund companies are not uniformly cooperative with all vendor search facilitators. And it may serve your consortium to evaluate this aspect of their RFP process as closely as the bidders themselves.
Regarding a Hold Harmless Agreement that you and Inruder have referred to as a potential deal-breaker (or at least an impediment to lower cost bidders) can you please paste it in your next post or give me a citation within the RFP.
Your Consortium brings value as an aggregator, and it is possible to measure & exchange aggregation value for plan administration expense offsets.
Cheers,
Danc
#7
Posted 17 October 2007 - 10:48 PM
The RFP is available for download? All I saw there were two RFPs, one for Musical Instruments and one for Textbooks. Nothing about investment providers or 403(b) Third Party Administration.
Apparently the date has passed for the RFP mentioned.
Drat!
Any idea where it might still be available?
P.S. Both TIAA-CREF and Vanguard have worked with me to get teachers to sign up for their products, but they do not send out sales reps or do much to drum up business. The TIAA-CREF folks sent me a box of brochures and told me outright that I would have to be their sales force within my district! Both companies have great products, but they require us as dedicated employees to carry the flag for them.
IMO, this does not bode well for them responding to RFPs that don't look perfect to them, most likely the RFPs would just be ignored :-(
Apparently the date has passed for the RFP mentioned.
Drat!
Any idea where it might still be available?
P.S. Both TIAA-CREF and Vanguard have worked with me to get teachers to sign up for their products, but they do not send out sales reps or do much to drum up business. The TIAA-CREF folks sent me a box of brochures and told me outright that I would have to be their sales force within my district! Both companies have great products, but they require us as dedicated employees to carry the flag for them.
IMO, this does not bode well for them responding to RFPs that don't look perfect to them, most likely the RFPs would just be ignored :-(
#8
Posted 20 October 2007 - 03:37 PM
QUOTE(Econ Teacher @ Sep 14 2007, 09:18 PM)
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
Send me a copy of the RFP and I'll rustle up a TPA proposal. It likely won't fit the RFP, but it will be better than any of the oligoplists will offer. That applies to anyone.
Thomas L. Geer, J.D., LL.M.
Benefit Plan Solutions
Blog: http://401k-403b-457-plansblog.blogspot.com/
Email: geertom@gmail.com
Phone & Fax: (888) 315-6720
Benefit Plan Solutions
Blog: http://401k-403b-457-plansblog.blogspot.com/
Email: geertom@gmail.com
Phone & Fax: (888) 315-6720
#9
Posted 27 November 2007 - 12:05 PM
QUOTE(Econ Teacher @ Sep 14 2007, 06:18 PM)
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
#10 Guest_Sierra_*
Posted 27 November 2007 - 09:31 PM
QUOTE(Guru @ Nov 27 2007, 12:05 PM)
QUOTE(Econ Teacher @ Sep 14 2007, 06:18 PM)
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
#11
Posted 30 November 2007 - 11:21 AM
QUOTE(Sierra @ Nov 27 2007, 07:31 PM)
QUOTE(Guru @ Nov 27 2007, 12:05 PM)
QUOTE(Econ Teacher @ Sep 14 2007, 06:18 PM)
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
#12 Guest_Sierra_*
Posted 30 November 2007 - 07:56 PM
QUOTE(Guru @ Nov 30 2007, 11:21 AM)
QUOTE(Sierra @ Nov 27 2007, 07:31 PM)
QUOTE(Guru @ Nov 27 2007, 12:05 PM)
QUOTE(Econ Teacher @ Sep 14 2007, 06:18 PM)
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
#13
Posted 05 December 2007 - 03:29 PM
QUOTE(Sierra @ Nov 30 2007, 05:56 PM)
QUOTE(Guru @ Nov 30 2007, 11:21 AM)
QUOTE(Sierra @ Nov 27 2007, 07:31 PM)
QUOTE(Guru @ Nov 27 2007, 12:05 PM)
QUOTE(Econ Teacher @ Sep 14 2007, 06:18 PM)
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
Are we talking about the Military TSP ??
QUOTE(Sierra @ Nov 30 2007, 05:56 PM)
QUOTE(Guru @ Nov 30 2007, 11:21 AM)
QUOTE(Sierra @ Nov 27 2007, 07:31 PM)
QUOTE(Guru @ Nov 27 2007, 12:05 PM)
QUOTE(Econ Teacher @ Sep 14 2007, 06:18 PM)
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
PS. I have read many posts on this website from you. Why are you so against people using advisors ?? You are obviously educated, but most are not. So what are they to do ??
#14 Guest_Sierra_*
Posted 05 December 2007 - 07:32 PM
[quote name='Guru' date='Dec 5 2007, 03:29 PM' post='17073']
[quote name='Sierra' post='17035' date='Nov 30 2007, 05:56 PM']
[quote name='Guru' post='17023' date='Nov 30 2007, 11:21 AM']
[quote name='Sierra' post='16964' date='Nov 27 2007, 07:31 PM']
[quote name='Guru' post='16951' date='Nov 27 2007, 12:05 PM']
[quote name='Econ Teacher' post='15553' date='Sep 14 2007, 06:18 PM']
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
[/quote]
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
[/quote]
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
[/quote]
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
[/quote]
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
Are we talking about the Military TSP ??
[quote name='Sierra' post='17035' date='Nov 30 2007, 05:56 PM']
[quote name='Guru' post='17023' date='Nov 30 2007, 11:21 AM']
[quote name='Sierra' post='16964' date='Nov 27 2007, 07:31 PM']
[quote name='Guru' post='16951' date='Nov 27 2007, 12:05 PM']
[quote name='Econ Teacher' post='15553' date='Sep 14 2007, 06:18 PM']
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
[/quote]
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
[/quote]
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
[/quote]
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
[/quote]
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
PS. I have read many posts on this website from you. Why are you so against people using advisors ?? You are obviously educated, but most are not. So what are they to do ??
[/quote]
===================================================================
They should stop being victimized by becoming educated. Having said that, a professional distributor of products or services is not an advisor. He/she is being paid to sell not to advise. I am for using an advisor when the client buys no-load and pays an advisor directly on an as need basis. I am opposed to the professional distributor being referred to as an advisor when he gets paid a commission for selling the distributor's product line with that not so incidental cost being passed on to the consumer.
When was the last time you heard of a group of people who were so upset with having only no-loads to choose from that they demanded loaded funds be added to the investment lineup? You are as much an investment advisor as the Macy furniture man is a furniture advisor.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[quote name='Sierra' post='17035' date='Nov 30 2007, 05:56 PM']
[quote name='Guru' post='17023' date='Nov 30 2007, 11:21 AM']
[quote name='Sierra' post='16964' date='Nov 27 2007, 07:31 PM']
[quote name='Guru' post='16951' date='Nov 27 2007, 12:05 PM']
[quote name='Econ Teacher' post='15553' date='Sep 14 2007, 06:18 PM']
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
[/quote]
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
[/quote]
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
[/quote]
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
[/quote]
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
Are we talking about the Military TSP ??
[quote name='Sierra' post='17035' date='Nov 30 2007, 05:56 PM']
[quote name='Guru' post='17023' date='Nov 30 2007, 11:21 AM']
[quote name='Sierra' post='16964' date='Nov 27 2007, 07:31 PM']
[quote name='Guru' post='16951' date='Nov 27 2007, 12:05 PM']
[quote name='Econ Teacher' post='15553' date='Sep 14 2007, 06:18 PM']
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
[/quote]
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
[/quote]
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
[/quote]
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
[/quote]
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
PS. I have read many posts on this website from you. Why are you so against people using advisors ?? You are obviously educated, but most are not. So what are they to do ??
[/quote]
===================================================================
They should stop being victimized by becoming educated. Having said that, a professional distributor of products or services is not an advisor. He/she is being paid to sell not to advise. I am for using an advisor when the client buys no-load and pays an advisor directly on an as need basis. I am opposed to the professional distributor being referred to as an advisor when he gets paid a commission for selling the distributor's product line with that not so incidental cost being passed on to the consumer.
When was the last time you heard of a group of people who were so upset with having only no-loads to choose from that they demanded loaded funds be added to the investment lineup? You are as much an investment advisor as the Macy furniture man is a furniture advisor.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
#15
Posted 20 December 2007 - 10:32 AM
[quote name='Sierra' date='Dec 5 2007, 05:32 PM' post='17074']
[quote name='Guru' date='Dec 5 2007, 03:29 PM' post='17073']
[quote name='Sierra' post='17035' date='Nov 30 2007, 05:56 PM']
[quote name='Guru' post='17023' date='Nov 30 2007, 11:21 AM']
[quote name='Sierra' post='16964' date='Nov 27 2007, 07:31 PM']
[quote name='Guru' post='16951' date='Nov 27 2007, 12:05 PM']
[quote name='Econ Teacher' post='15553' date='Sep 14 2007, 06:18 PM']
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
[/quote]
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
[/quote]
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
[/quote]
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
[/quote]
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
Are we talking about the Military TSP ??
[quote name='Sierra' post='17035' date='Nov 30 2007, 05:56 PM']
[quote name='Guru' post='17023' date='Nov 30 2007, 11:21 AM']
[quote name='Sierra' post='16964' date='Nov 27 2007, 07:31 PM']
[quote name='Guru' post='16951' date='Nov 27 2007, 12:05 PM']
[quote name='Econ Teacher' post='15553' date='Sep 14 2007, 06:18 PM']
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
[/quote]
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
[/quote]
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
[/quote]
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
[/quote]
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
PS. I have read many posts on this website from you. Why are you so against people using advisors ?? You are obviously educated, but most are not. So what are they to do ??
[/quote]
===================================================================
They should stop being victimized by becoming educated. Having said that, a professional distributor of products or services is not an advisor. He/she is being paid to sell not to advise. I am for using an advisor when the client buys no-load and pays an advisor directly on an as need basis. I am opposed to the professional distributor being referred to as an advisor when he gets paid a commission for selling the distributor's product line with that not so incidental cost being passed on to the consumer.
When was the last time you heard of a group of people who were so upset with having only no-loads to choose from that they demanded loaded funds be added to the investment lineup? You are as much an investment advisor as the Macy furniture man is a furniture advisor.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
Looks like someone is taking this all personal. I do believe some of these "professional distributors" as you like to call them are true advisors. I am in no way saying they all are. We all know that. And the truth of it is ... Most of these "prfessional Distrubtors" have access through sales networks to offer no load mutual funds ... and some still do for certain clients. The bottom line is ... It is all up to the client. A client who wants no-load will find no-load. But, ask around ... There are many clients who love thier 'professional distributors" that advise them and help them plan for more than just thier next salary reduction. The 403(b) is only the first step in your retirement. I could go on and on Joel, but you are just going to keep trying to butt heads with me. The bottom line is this: I think you have a personal vendetta against some company or companies out there. This would all be easier if you would just call them out instead of grouping them all together. So, I'm sorry for whoever hurt your feelings at some point in your career. The final word is: No-load isn't perfect for everone; Annuity based contracts aren't perfect for everyone!!
Mery Christmas !!
[quote name='Guru' date='Dec 5 2007, 03:29 PM' post='17073']
[quote name='Sierra' post='17035' date='Nov 30 2007, 05:56 PM']
[quote name='Guru' post='17023' date='Nov 30 2007, 11:21 AM']
[quote name='Sierra' post='16964' date='Nov 27 2007, 07:31 PM']
[quote name='Guru' post='16951' date='Nov 27 2007, 12:05 PM']
[quote name='Econ Teacher' post='15553' date='Sep 14 2007, 06:18 PM']
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
[/quote]
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
[/quote]
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
[/quote]
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
[/quote]
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
Are we talking about the Military TSP ??
[quote name='Sierra' post='17035' date='Nov 30 2007, 05:56 PM']
[quote name='Guru' post='17023' date='Nov 30 2007, 11:21 AM']
[quote name='Sierra' post='16964' date='Nov 27 2007, 07:31 PM']
[quote name='Guru' post='16951' date='Nov 27 2007, 12:05 PM']
[quote name='Econ Teacher' post='15553' date='Sep 14 2007, 06:18 PM']
My district is part of a consortium of 12- 15 districts in the Phoenix area that has just issued an RFP for 403b, 403b Roth, and 457 plans. We have been told that it is unlikely that Vanguard or other large mutual companies will bid and that only about 5 or 6 of the usual suspects (AIG, VALIC, ING) will probably bid. The reasons stated were the additional expenses of administering the plan and because in the past they have refused to sign hold harmless agreements. This is exactly what intruder said might happen in a recent post. We were told that we would still have the ability to invest in Vanguard but it sounds like it would be through a wrap account with the insurance company acting as an administrator much in the way that you can invest in Vanguard today through a variable annuity with one of the insurance companies. This simply adds another layer of costs onto the structure!
It appears that the way the RFP is written that there is little/no possibility to have a TPA handle admin and then help choose low cost, no load mutual funds to invest in, similar to the way that LAUSD is doing. There is a lower cost, no-advisor, web-based option in the RFP but I fear that while it might be lower cost it still will be much higher than need be.
I would appreciate some help from some of you on this board. Could you take a look at the RFP and make some suggestions as to the weaknesses that you see in the plan and whether I should lobby to toss the RFP? The RFP was put out without any teacher or support staff input. A committee is only now being formed to choose up to 3 providers from the companies that submit the RFP.
Also, do the IRS regs allow for a TPA to simply administer the plan and then have a committee of interested parties pick, say 10 different Vanguard or Fidelity funds (target, lifestrategy/asset allocation, balanced, total bond, total stock, index 500) that people could choose from?
The RFP is available for download at:
http://www.phxhs.k12.az.us/education/dept/...?sectionid=5534
The actual RFP starts on page 19. The 1st 18 pages are mostly legal boilerplate (I think).
[/quote]
I would like to make a few points in regard to this issue. First off, do you know what the regs say in regards to the TPA ?? What they say is this: The TPA can be paid for from 3 different places. The company, The district, or The client. As a client, you probably are not interested in paying for the TPA. Right ?? The SD isn't looking to cover the bill. Neither is the Investment Co. So, What is happening is the cost and sometimes, just the responsibilities (avoiding the TPA) are being distributed between the SDs and the Companies. With a smaller "no-load" type mutual fund company, they do not have the assets within thier company to help cover the cost or the infrastructure to facilitate the administration of these plans.
In regards to some of your other concerns, there are many differences in these "high cost" insurance companies and your mutual fund companies. Many investors are not as educated as you might be. The "non-advisor" type of plans might wor for some investors, but the "uneducated" type of investor might put themselves into poor investments. I have always believed in having or atleast working with an advisor. Advisors can help you make a more educated decision on your investments. I do not know all companies, but most that offer 403(b) services, offer no charge for thier services. This may come as a shock, but a huge percentage of people do not have an advisor. An advisor can help you out in many ways including: educating you about the use of a trust to protect your family from taxes at the time of your death, protecting your family, making sure your assets are allocated correctly(wether they are with the same company or not), and full up retiremenbt planning.
The bottom line: Sometimes you have to look at the big picture. While low cost may seem perfect for you, they might not be good for the masses. The "sharks" you talk about may be an annoyance for some, but may be a god send for others. Sometimes the the benfits associated with the "isurance company" 403(b)s may outweigh the cost. You find out about both sides of the picture before passing judgement.
[/quote]
Have you tried selling your snake oil to the Federal Thrift Savings Plan. Shame on them for not serving the needs of Federal employees and the U.S. Military. I will be writing to my elected representatives as well as President Bush as soon as I exit this thread.
Joel L. Frank
[/quote]
Joel,
The military TSP is Crap !! I should know ... I served for 4.5 years ...
[/quote]
If your assertion is correct you should be able to get their business. Afterall the Board of Trustees want what is best for the employee/investor. So what could possibly be their reason for not allowing the professional distributor (like you) in as an alternative to their de minimis cost of investing?
I await your learned reply.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
PS. I have read many posts on this website from you. Why are you so against people using advisors ?? You are obviously educated, but most are not. So what are they to do ??
[/quote]
===================================================================
They should stop being victimized by becoming educated. Having said that, a professional distributor of products or services is not an advisor. He/she is being paid to sell not to advise. I am for using an advisor when the client buys no-load and pays an advisor directly on an as need basis. I am opposed to the professional distributor being referred to as an advisor when he gets paid a commission for selling the distributor's product line with that not so incidental cost being passed on to the consumer.
When was the last time you heard of a group of people who were so upset with having only no-loads to choose from that they demanded loaded funds be added to the investment lineup? You are as much an investment advisor as the Macy furniture man is a furniture advisor.
Joel L. Frank
Pension Columnist
The Chief-Civil Service Leader
277 Broadway
New York, NY 10007
[/quote]
Looks like someone is taking this all personal. I do believe some of these "professional distributors" as you like to call them are true advisors. I am in no way saying they all are. We all know that. And the truth of it is ... Most of these "prfessional Distrubtors" have access through sales networks to offer no load mutual funds ... and some still do for certain clients. The bottom line is ... It is all up to the client. A client who wants no-load will find no-load. But, ask around ... There are many clients who love thier 'professional distributors" that advise them and help them plan for more than just thier next salary reduction. The 403(b) is only the first step in your retirement. I could go on and on Joel, but you are just going to keep trying to butt heads with me. The bottom line is this: I think you have a personal vendetta against some company or companies out there. This would all be easier if you would just call them out instead of grouping them all together. So, I'm sorry for whoever hurt your feelings at some point in your career. The final word is: No-load isn't perfect for everone; Annuity based contracts aren't perfect for everyone!!
Mery Christmas !!
