Lawsuit Says Teachers Are Overcharged on Annuities - New York Times
For years I've railed against the NEA and their horrible product, the NEA Valuebuilder (some have termed it the ValueKiller). I wrote an article many years ago titled, "Does the NEA Practice What It Preaches?" skewering the NEA Member Benefits program for selling a product that is excessive in fees and kicks back many millions of dollars to the NEA Member Benefits program each year.
Now the Valuebuilder product is getting its day in the sun, a lawsuit by Keller Rohrback was filed last week in Washington State saying that the product and its promotion violates ERISA. It's an interesting arguement and I hope it has legs.
I think the National NEA should have stepped in many years ago and killed this product, instead they continue to misrepresent the product to educators. The NEA has always had the opportunity to educate its members about 403(b) plans and work to make them better, instead they chose to join the financial services industry in the raping of educators retirement accounts.
My wife is a teacher and her local and state union work hard to ensure that her district offers good health benefits, they don't go out and sponsor a health plan and then sell it, the lobby for better plans - I believe that is the role the union should take when it comes to 403(b) and 457(b) plans. It's been my experience that many of the local unions in California have become to take on the role of advocate in this arena, kudo's to them, perhaps they can lead the national NEA back to where it needs to be.
I'll follow this lawsuit closely and report on what happens. In the meantime, if you are an educator, voice your opinion to your union and let them know that you want them to work for you, not try to make money off of you.
Scott Dauenhauer, CFP, MSFP, AIF