Thursday, January 25, 2007

NEA Valuebuilder AKA ValueKiller Articles

With the recent announcement of the NASD partnering with the NAIC and the NEA Member Benefits (distributor of the high cost NEA Valuebuilder Variable Annuity) I thought it appropriate to link to a few articles that mention this horrible product.

LA Times Article - Unions Advice is Failing Teachers

San Diego Union Tribune Article - Saving For Retirement Harder wtih New 403(b) Law

403bWise Article

Scott Dauenhauer, CFP, MSFP, AIF

Tuesday, January 23, 2007

NASD Partners with NEA Valuebuilder?

NASD - Press Room - News Release - 11/8/06

This has to be a joke. This link will take you to a press release that announces a grant that will involve the NEA Member Benefits with investment education. What follows is my e-mail to the NASD:

"I wanted to convey to you my shock with regards to the NASD partnering with NEA Member Benefits. The NASD should be investigating the NEAMB, not partnering with them. The NEA has been selling the NEA Valuebuilder product - an excessively priced Variable Annuity and Mutual Fund program to its members for years. This program is worse than the one Spitzer busted in New York (ING and NYSUT). The NEAMB is an RIA and they are not fulfilling their fiduciary responsibility to the plan. There is excessive revenue sharing, poor oversight, and kickbacks to unions and agents involved. You should not be endorsing NEAMB, by doing so you are endorsing an entity that exists to transfer retirement assets from its members to the NEAMB (probably to subsidize other programs). You should be sending subpoena's, not endorsements."

This is absolutely ridiculous. NEA Member Benefits has been ripping off teachers for about a decade now and they are getting rewarded for it by regulators, what world are we living in.

Scott Dauenhauer, CFP, MSFP, AIF

Friday, January 19, 2007

Plan Sponsor: Revenue Sharing

Magazine Articles []

If you read this article you would think that a revolution is happening, it isn't. Providers are not rushing to disclose revenue sharing agreements, they are only doing so when forced and they are being dragged kicking and screaming along the way.

Instead of figuring out the best way to disclose revenue sharing agreements (Let's be honest, Kickbacks), why don't we simply do away with them?

Scott Dauenhauer, CFP, MSFP, AIF

Tuesday, January 02, 2007

Government Retiree Health Benefits Cost Could Top $100 Billion

Ventura County Star: County News

This is a good article on governement retiree health care costs. It basically is telling us that the taxpayers are going to have to cough up about another $100 billion over the next 20 - 30 years to pay benefits promised, but not reserved for by governement entities in California. Ouch. That is a lot of money - as the old saying goes, a billion here, a billion there, pretty soon it adds up to a lot of money!

It's not just the public sector that has these problems, the private sector does too. It is all these unfunded liabilities that may end up bring two enemies together on a single issue - Government run healthcare. The private sector would like nothing else than to pawn off its liabilities to the government, this way they could become more competitive (so the saying goes) with companies whose home nation pays these costs. The public sector will have a hard time finding the money to fund these obligations and raising taxes is not something that keeps a politician in office for long. Thus unions and quite possibly corporate interests may come together to lobby for a government run healthcare system in order to get out of benefits they promised, but never saved up the end we (the taxpayer) still foot the bill.

I believe our health care system could use quite a bit of reform, but I don't believe government is the answer.

I also don't believe former state republican senator Keith Richmann's answer is the right. He advocates moving the retirement age from 60 to 65 or 70 for all public employees. While I do generally support a rise in retirement age, I don't believe Richmanns ideas make sense. Why keep an employee who wants to retire on the books? They'll be less productive, they'll get paid more (remember, government rewards longevity) than a new employee would (by probably a 2 - 2.5 to 1 margin), and at least in school districts could do harm to our children (a teacher who is sick of teachings won't do as good a job). These negatives outweigh the positives of a forced extension. However, I am in agreement that something needs to be done.

Scott Dauenhauer, CFP, MSFP