Thursday, March 23, 2017

403bCompare Rebirth

Way back in 2000, a group of 403(b) activists lobbied the California state legislature to pass a bill allowing school districts to control their 403(b) vendor list, the bill didn't make it in the original form, but instead became a disclosure bill. The law that was passed created what we now call, a website where all 403(b) vendors in California must register if they want to offer their products to California public schools. They must register and disclose their products. There is no other database like this in the country.

I was involved in both the lobbying and the development of the original website and have provided consulting services to CalSTRS (who operates the site) ever since. I've watched over the past 18 months as the people at CalSTRS worked to redesign and modernize the site, the new site launched this week and I think they've done a great job.

 Just a few new features you will see is an expense ratio range (low - medium - high) and a disclosure of whether the product will pay a commission when sold (no data on what the commission would be at this point). Comparisons are now simpler and all the data for mutual fund and annuities are in real time, including performance information. There are also filters to help you exclude certain products and a design that should allow for simpler navigation.

I've linked to a brochure and flyer below and you can watch a few of the videos as well:

CalSTRS 403bCompare Flyer

CalSTRS 403bCompare Brochure

Scott Dauenhauer, CFP, MPAS, AIF

Monday, February 27, 2017

Annuity Compensation Conflicts

Compensation conflicts with annuities abound. Most of the time the conflict is in selling one annuity over another to earn a higher commission or to earn a trip to a tropical paradise. However, there are also conflicts that exist once an agent has settled on a product to sell you - should they take their money now, or over time? I recently came across the following over at and found it interesting:

Tuesday, February 21, 2017

Opinion: Why I'm Skeptical On The NTSA's Fiduciary Press Release

Right about the time that the New York Times was beginning to release their stories on the significant issues in the land of 403(b), a trade organization (the NTSA - The National Tax-Deferred Savings Association) that represents 403(b) vendors, insurance agents, brokers and some Investment Advisors told Plansponsor magazine that they would change their policy as it pertains to "Fiduciary". The Plansponsor article is short on details but begins:

Wednesday, February 08, 2017

That TIAA Loan Lawsuit & My Opinion

TIAA is being sued for a loan scheme that benefits TIAA, not participants and my opinion is that TIAA is in the wrong. This doesn't mean they broke the law, but they lose the moral and ethical credibility they had accumulated by using a technique that the rest of the 403(b) industry uses, but most 401(k) plans did away with long ago.

Here is a link to the lawsuit.

According to Plansponsor:

"A new lawsuit argues the practices used by the Teachers Investment and Annuity Association (TIAA) to credit portions of interest payments made by participants on loans taken from their own retirement accounts back to the firm—rather than to the borrowing participant—violate the Employee Retirement Income Security Act (ERISA)."

I have first hand experience with this particular loan scheme. A client of mine was also taken advantage of by it several years back, though I did not learn of it until recently.