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Is there any reason to hope the situation many of us find ourselves in regarding 403(b) plans will improve with time?
I was a perfectly happy self-directed low-cost index fund investor who was affected by the lack of agreement between the TPA and provider. Unlike many others, I was involved in the selection of the TPA and I don't fault them (or the choice to go with a TPA for that matter) but I do lament the fact that the new 403(b) regulations have put me in a situation that took away much of my ability to invest the way I want.
Are the effects of the new regulations here to stay as they currently stand? In other words, is this as good as it's going to get?
Barney
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403(b) - Any Hope Things Will Get Better?
#2
Posted 27 February 2009 - 11:57 PM
QUOTE(Barney @ Feb 27 2009, 06:30 PM) 
Is there any reason hope the situation many of us find ourselves in regarding 403(b) plans will improve with time?
I was a perfectly happy self-directed low-cost index fund investor who was affected by the lack of agreement between the TPA and provider. Unlike many others, I was involved in the selection of the TPA and I don't fault them (or the choice to go with a TPA for that matter) but I do lament the fact that the new 403(b) regulations have put me in a situation that took away much of my ability to invest the way I want.
Are the affects of the new regulations here to stay as they currently stand? In other words, is this as good as it's going to get?
Barney
It dont get any better than this
#3
Posted 28 February 2009 - 01:51 PM
Hi Barney,
Hard to know what is going to happen in the future. IMO, in the meantime, most investors who got their perfectly fine low cost fund and the ability to self direct unilaterally terminated because of the new regs will probably not participate in the 403b for now. I don't think knowledgeable folks like you will participate in a high cost, commission laden annuity or managed mutual fund with revenue sharing that are in most plans. You simply know that expensive game and will not play.
Like you, they will wait if, and that's a big if, "403b plans will improve with time." So, in the meantime you have a fairly good "second banana" with the Roth IRA and you could save on your own. You last choice is to use the "broken record" technique by asking again and again to your TPA and your employer, "I want my fund back because I want more money in my pocket than the middle person." For sure, the nay sayers will say you are immature and you are wasting your time, but the frustrations of your story are well known this board and across the country. There are too many who are currently frustrated and angry with the policy makers and the industry, many of the unions and some school districts. In my district for example, 11000 teachers are left without a vendor at the moment.
Stay tuned to this board in the next few weeks for a significant example of how individuals can effect change.
Have a good day,
Steve
Hard to know what is going to happen in the future. IMO, in the meantime, most investors who got their perfectly fine low cost fund and the ability to self direct unilaterally terminated because of the new regs will probably not participate in the 403b for now. I don't think knowledgeable folks like you will participate in a high cost, commission laden annuity or managed mutual fund with revenue sharing that are in most plans. You simply know that expensive game and will not play.
Like you, they will wait if, and that's a big if, "403b plans will improve with time." So, in the meantime you have a fairly good "second banana" with the Roth IRA and you could save on your own. You last choice is to use the "broken record" technique by asking again and again to your TPA and your employer, "I want my fund back because I want more money in my pocket than the middle person." For sure, the nay sayers will say you are immature and you are wasting your time, but the frustrations of your story are well known this board and across the country. There are too many who are currently frustrated and angry with the policy makers and the industry, many of the unions and some school districts. In my district for example, 11000 teachers are left without a vendor at the moment.
Stay tuned to this board in the next few weeks for a significant example of how individuals can effect change.
Have a good day,
Steve
#4
Posted 02 March 2009 - 02:04 PM
QUOTE(sschullo @ Feb 28 2009, 10:51 AM)
Hard to know what is going to happen in the future. IMO, in the meantime, most investors who got their perfectly fine low cost fund and the ability to self direct unilaterally terminated because of the new regs will probably not participate in the 403b for now. I don't think knowledgeable folks like you will participate in a high cost, commission laden annuity or managed mutual fund with revenue sharing that are in most plans. You simply know that expensive game and will not play.
Have a good day,
Steve
One of things that frustrates me is how many 403b participants don't have a clue about their investments. We ended up with a TPA that has agreements in place covering about 85% of our participants' existing accounts - wonderful. Unfortunately, that 85% is in insurance annuities and a few high fee mutual funds. The other 15% of us were in low-cost mutual funds. So we helped out our clueless colleagues at the expense of the people who actually understood what they are doing. Big sigh.
Barney
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