For all my non-educator clients out there, please pass this NY Times article along.
“Schoolteachers and others who pursue careers of service in exchange for modest paychecks get lightly regulated retirement plans that often charge excessive fees.”
This article has been in the works for awhile and there are several more on the way. It attempts to blow the lid on the many problems in the world of non-ERISA 403(b).
Here are a few highlights:
“In fact, millions of people who save in 403(b) plans may be losing nearly $10 billion each year in excessive investment fees, according to a recent analysis by Aon, a retirement consultant.
“It’s a wealth transfer from those who don’t know any better — Main Street — to those who do: Wall Street,” said Scott Dauenhauer, a financial planner who works with public schoolteachers and as a consultant to school plans. “What makes me the most angry is that public school employees are not protected the same as their private sector counterparts.””
“Those assets also escaped tighter protections issued in April by the Obama administration, which will require brokers to put the interests of their customers first when handling retirement dollars. “There is very little, if any, oversight, so you often end up with conflicted advice, high fees and low service,” said Marcia Wagner, an employee benefits lawyer who has been practicing for more than 30 years.”
The issue of teacher defined contribution plans is a big deal and needs more attention. Teacher (and most public school employees) do not have the same protections as private sector workers and are sold a lot of junk.
I encourage you to go to www.403bwise.com to learn more or my other blog http://teachersadvocate.blogspot.com.
Scott Dauenhauer, CFP, MPAS, AIF