Which company to go with... 403b

[mannyahles]

This is the list that is approved at my school district. I have spoken with an advisor with AXA but I read many reviews of how expensive they are. I have a meeting with a Nationwide advisor Feb 9th. I currently have a Nationwide 457B advised by Meeder.

Any opinions on any of these companies?

1164 American Century Investments
1062 American Fidelity Assurance Company
1035 Americo Financial Life and Annuity Insurance Company
1041 Ameriprise Financial Inc.
1096 Annuity Investors Life Insurance Company (Great American Life Insurance Co.)
1067 AXA Equitable Life Insurance Company
1097 CalSTRS
1018 Commonwealth Annuity and Life Insurance Company
1104 CUSO Financial Services, L.P. (***)
1133 Fidelity Investments Institutional Services Com.**
1077 First Investors Corporation
1025 Franklin Templeton Investments
1167 General American Life Insurance Company
1092 Great American Life Insurance Company (Annuity Investors Life Insurance Co.)
1113 GWN Securities, Inc
1014 Horace Mann Companies
1135I ndustrial-Alliance Pacific Life Ins Co, US Branch
1060 ING Life Insurance & Annuity Company
1059 ING - ReliaStar Life Insurance Company
1052 Legend Group, Inc.,
1036 Life Insurance Company of the Southwest
1068 Lincoln Investment Planning, Inc.
1029 Lincoln Nat'l Life Ins Co (Lincoln Fin Grp), The
1074 MassMutual, through its subsidiary, C.M. Life Insurance Co.1015Modern Woodmen of America
1073 MetLife Insurance Company of Connecticut (formerly Travelers Life & Annuity)
1024 Metropolitan Life Insurance Co -aka- MetLife, MetLife Investors, MetLife Resources
1043 Midland National
1188 National Health Insurance Co (NHIC)
1144 Nationwide Life Insurance Company -- SDCOE/Fringe Benefits Consortium 403(b)/457(b) Program
1083 New York Life Ins. & Annuity Corp.
1472 North American Company for Life and Health
1121 Oppenheimer Funds Distributor, Inc
1030 PFS Investments Inc
1127 PlanMember Services Corp
1022 Security Benefit
1087 Symetra Life Insurance Company
1038 Thrivent Financial for Lutherans1066Thrivent Investment Management Inc.
1160 Transamerica Life Insurance Company
1090 United Teacher Associates Insurance Company
1117 VALIC1042Waddell & Reed, Inc

 

[Badger]

As typical with most school districts most of these are insurance and annuity choices - usually some of the last places you want to place your 403b money. Been there. You may have a couple of choices for mutual funds (American Century and Franklin Templeton caught my eye). Others on the forum will be better able to advise you with this.
We were faced with a similar situation a few years back with only Merrill Lynch as an alternative. They did not appeal to us either and wanted to place our money in expensive loaded funds then "manage" the money by buying and selling loaded funds at their discretion. Good plan for them - bad for us.
What we did was to put the money into a MM fund with ML for a small fee and then transfer it to a mutual fund company of our choice. Although it was a little extra hassle it got us around the poor choices and into an investment that we wanted.

Cheers!

 

[travelover]

DW is a teacher and had a similar list. I got her out of a bad annuity and convinced the coordinator to bring in Fidelity. What a breath of fresh air.

Fidelity hands down.

 

[REWahoo]

DW is a teacher and had a similar list. I got her out of a bad annuity and convinced the coordinator to bring in Fidelity. What a breath of fresh air.

Fidelity hands down.

It appears the "1133 Fidelity Investments Institutional Services Com." included in Manny's list is something different from the Fidelity Investments I am familiar with. Looks like they offer advisor services and Fidelity Advisor Funds, where I see sales charges of 5 to 6 percent.

 

[Htown Harry]

Manny, I wondered what CalSTRS might be, so I googled it and clicked through to this site: 403bCompare

It looks like you can compare the California teacher plan features to some degree.

I agree that you should be choosing among mutual fund providers, not annuity providers, with an eye toward low-fee funds.

 

[FinanceDude]

It appears the "1133 Fidelity Investments Institutional Services Com." included in Manny's list is something different from the Fidelity Investments I am familiar with. Looks like they offer advisor services and Fidelity Advisor Funds, where I see sales charges of 5 to 6 percent.

Not likely, if the 403B is set up for a whole school district, the assets will be well above $1 million, and the funds will be sold at NAV..........

 

[travelover]

It appears the "1133 Fidelity Investments Institutional Services Com." included in Manny's list is something different from the Fidelity Investments I am familiar with. Looks like they offer advisor services and Fidelity Advisor Funds, where I see sales charges of 5 to 6 percent.

Good catch. Manny stay away from the advisor funds.

 

[yakers]

Go to 403bwise.com for specific advice. DW had Nationwide, not great but better than some. Over over 10 years she invested in their 'internal' version of the Fidelity Contrafund. Her personal portfolio return was 9.something% but the retail Contrafund returned 14%+ during the same period. The fees and drains on most 403b plans are criminal. Some are so bad its better to skip them and just use a Roth. Got out of the 403b after retirement and rolled it over to VG Wellesley, stopped worrying and cussing.

 

[BTravlin]

I'm really surprised at the mix of offerings available to you. Very heavy on life insurance and very light on mutual funds. I'd be complaining loudly if I were a member of that plan.

My DH is a school teacher and she had some of her money with Oppenheimer & Fidelity. Fidelity decided to opt out of the school 403b plan so we had to make some changes. Her school district only offered about ten choices so the decision making process was pretty easy. Threw out all the insurance companies right off the bat and concentrated on the mutual fund offerings. American Century was the best option by far. Fairly decent mix of low cost funds to choose from. The customer service rep was very helpful and he helped us navigate through the requirements for transferring the funds with ease. Didn't care for Oppenheimer and their proprietary, high cost funds so we transferred those at the same time. One thing I like about American Century is they are located in Kansas City, MO and the people who work there are more down to earth and easier to deal with than your typical northeastern investment pro. Of course I'm somewhat biased having lived most of my life in the Midwest.

 

[nun]

I've never understood why Life insurance companies and high expense investments are so commonly offered as choices. Wouldn't it be far simpler and cheaper to go with no load index fund companies. You could buy a SPIA if you needed one in retirement.

My school's retirement plan providers are Fidelity, TIAA-CREF, Valic and Lincoln Financial, so pretty good. I went with TIAA-CREF, but I've never understood why the institutional retirement funds are all described as annuities and have slightly higher expenses than the equivalent retail mutual funds. Is it a technical/tax issue with the difference between 403b/457 and 401ks and IRAs? For practical purposes my CREF annuity funds seem very similar to the retail mutual funds and when I retire I'll be taking systematic withdrawals just like from a 401k fund. So what's the difference, is it just that as it's an annuity my distribution choices automatically include a "lifetime payment" option.

 

[mannyahles]

Thank you for all the replies. I will have to do a lot more research to find out which company has low costs and good funds to invest in.

 

[yakers]

I've never understood why Life insurance companies and high expense investments are so commonly offered as choices. Wouldn't it be far simpler and cheaper to go with no load index fund companies. You could buy a SPIA if you needed one in retirement.

My school's retirement plan providers are Fidelity, TIAA-CREF, Valic and Lincoln Financial, so pretty good. I went with TIAA-CREF, but I've never understood why the institutional retirement funds are all described as annuities and have slightly higher expenses than the equivalent retail mutual funds. Is it a technical/tax issue with the difference between 403b/457 and 401ks and IRAs? For practical purposes my CREF annuity funds seem very similar to the retail mutual funds and when I retire I'll be taking systematic withdrawals just like from a 401k fund. So what's the difference, is it just that as it's an annuity my distribution choices automatically include a "lifetime payment" option.

nun,

TIAA-CREFF are one of the few 'good guys', not available in a lot of school systems like LAUSD & Chicago and several others I know. Vanguard is not offered, some school district hogwash about hold harmless provisions which VG will not sign. Since you have a decent offering you may not need to know more but if you are really interested then check out the 403bwise site for all the gory details.

 

[mannyahles]

I went to the 457b forum and it is not very helpful nor very busy. Its not as popular as this site!

 

[ronin]

Look at CalSTRS. It is in partnership with TIAA-CREF and has a good line-up of funds.

Pension2

 

[mannyahles]

My school retirement is thru CalSTRS as teachers in California (all I believe but not 100%) don't pay into social security.

I will check CalStRS out to see about there investments!

 

[ronin]

I'm a retired CA teacher, and the 403b plan offered through CalSTRS was different during my career but quite good. I went another route (not a bad one by any means), being young and dumb, so to speak. But if I had it to do over, I'd probably go with the STRS plan.

I just rolled my 403b to an IRA and am now working on my wife's. Pretty simple, 10-15 min. online and about a 10 day wait and it was all done.

 

[bcinvest]

"Is it a technical/tax issue with the difference between 403b/457 and 401ks and IRAs?"

It is a lobbying issue. The code sections have subtle differences and require different administrative requirements. For example not for profits used to offer 403(b) plans because they were less costly to administer partly because they had no plan document requirement. That has changed.

Insurance company lobbyists were successful getting 403(b) pushed through to avoid being left behind in the pension plan revenue grab.

This would be a great area for tax simplification. A simple tax deferred retirement plan replacing all three.

 

[jazz4cash]

Lobbyists! This interests me as my daughter is about to embark on a teaching career. I seem to recall some participants can roll out of the mandated plan into an IRA, but I'm not sure if all plans permit this or what the limitations might be. Perhaps there is a vesting period involved.

 

[yakers]

There is a book I gave my nieces (too late for DW & my sister) as they began teaching: Amazon.com: Teach and Retire Rich (9780972611718): Dan Otter: Books
Just putting some thought on saving, LBYM and retirement starts to align ones financial life.

 

[U1964]

Look at CalSTRS. It is in partnership with TIAA-CREF and has a good line-up of funds.

Pension2

I second this recommendation. Opened an account there for my wife's 403 (b).

There is some related info on the 403bwise forums (bwise.ibforums.com)

You get access to a limited number of Vanguard funds. Last I checked it was:
Vanguard Institutional Index
Vanguard Mid-Cap Index
Vanguard Small-Cap Index
Vanguard Total Stock Market Index
Vanguard Inflation-Protected Securities
Vanguard Short-Term Bond Index

The plan tags on a 0.33% fee to the fund expenses. Example: Vanguard Total Stock Market Index 0.06% + 0.33% -> 0.39%

 

[mannyahles]

I second this recommendation. Opened an account there for my wife's 403 (b).

There is some related info on the 403bwise forums (bwise.ibforums.com)

You get access to a limited number of Vanguard funds. Last I checked it was:
Vanguard Institutional Index
Vanguard Mid-Cap Index
Vanguard Small-Cap Index
Vanguard Total Stock Market Index
Vanguard Inflation-Protected Securities
Vanguard Short-Term Bond Index

The plan tags on a 0.33% fee to the fund expenses. Example: Vanguard Total Stock Market Index 0.06% + 0.33% -> 0.39%

I will definitely check into teh STRS plan. I only read good things about Vanguard. I will also look into controlling the plan myself and save the advisor fee. I like numbers anyways! lol

 

[Htown Harry]

"Is it a technical/tax issue with the difference between 403b/457 and 401ks and IRAs?"

One significant difference between a 457 and an IRA relates to minimum age for penalty-free withdrawals. A 457 can be withdrawn penalty- (but not-tax-) free anytime after separation from service. Roll it over to an IRA, however, and that flexibility is lost.

I have no information on 403b's. They may be different.

 

[bcinvest]

"I seem to recall some participants can roll out of the mandated plan into an IRA, but I'm not sure if all plans permit this or what the limitations might be. Perhaps there is a vesting period involved."

A 403(b) can be rolled over into a 401(k), IRA, 403(b), 457, Roth IRA and several other plans. Definitely on termination and possibly for other events. (I much more familiar with qualified plans.) Employee deferrals are always non forfeitable, any employer match may be subject to a vesting schedule.