Thursday, January 23, 2014

Enough With The Ridiculous Rollover Process Already

It's no secret that I use this blog to vent about my dealings with the 403(b) I present the ridiculous obstacles placed in front of employees attempting to rollover their money.

I helped a client start a 457(b) in local school district and when the client retired was helping to rollover those funds to consolidate (and get access to better options).  I inquired with the folks at the district (who were easy to work with and great people) and they gave me a number to call.

Instead of calling the number I helped the client log into her account to attempt to find the rollover form...nothing there.  We could get a distribution form to take a withdrawal, but not a form to rollover...weird.

Next step is to make a quick call.  I figured that I could get the form myself without involving my client since the form is blank (contains zero client information) and is associated with a government plan (thus technically subject California's Public Records Act).  I've done this with dozens of other companies and rarely run into an instances where I can't get such simple documentation.  I was wrong.

The representative would not e-mail me the form and could not answer why the form was not on their website (even behind the client's secure login).  I was told it was for security reasons that I could not be sent a blank rollover form.  What?  It's a breach of security for a financial services company to e-mail me a blank document associated with a public employer?  What possible security breach could occur?

My response was a bit smartass, but clearly frustrated - "exactly what privacy or security breach is occurring if you send me a blank document that allows me to help my client rollover their funds?"

The response I got was that it was just policy and that if I was sent the document it would be a breach of security, if we wanted the document my client had to be on a phone call with a representative or visit an office of the company.

I had to respond to this nonsense.  I asked "when my client receives the document and shares it with me would there be a security breach?" - the answer was no.  This was perplexing to me.  A blank document sent to me by the company is a security breach, but if shared by my client isn't.  Remember, the document has ZERO personal information on it and is even generic in regards to the employer. If it's a breach for the company to send me the document it should be a breach for me to even have possession of it.

I knew I had hit a brick wall and scheduled a three-way conference with my client and the company.   After being on hold for 20 minutes (it was the day after MLK day) we were told that the representative could not help us, if we wanted a "rollover" form we would need to be transferred to a special unit. Another few minutes go by and we get a person on the line.  The rep we were transferred to was clearly trained on how to retain the assets or to get the client to roll them over to the company's own product(s) and I finally had to cut him off and tell him "It's none of your business WHY my client is rolling over their money, they've requested the form, please e-mail."  Finally, the rep relented and said he would e-mail it, but it could take up to 48 hours as it had to be "approved"....really?

My client finally received the form later that day and e-mailed it to me (which apparently is not a security breach).

For those of you interested in the Rollover form, I've posted it below.

Tuesday, January 14, 2014

NTSAA Changes Name to NTSA

In a strange announcement the National Tax-Sheltered Account Association (NTSAA) has decided to change its name to the National Tax-Deferred Savings Association (NTSA).  No word on why it wasn't the NTDSA.

The rationale behind this change was they didn't want to be mixed up with an association that might represent off-shore tax-shelters.  Evidently this is a problem for them.

Interestingly enough, there was no change in the mission - even though the term "Tax-Deferred" certainly covers a vastly larger number of product offerings.

The mission still seems to be protecting insurance agent's product sales in k-12 employer defined contribution programs.  The theme for the upcoming conference in June is "Keep Choice Alive." There is a refusal to accept any behavioral research into the organization's mission (this is my opinion based on the evidence),  the same old "offer as many products as possible" mission is front and center.

With that being said, a quick review of their upcoming summit is actually encouraging.  There are several good sessions with many respected speakers (Michael Kitces being one of them).  I don't see some of the normal sleazy sessions that I've attended in the past.  I have to give Chris DeGrassi credit, the agenda looks good - even if the theme is mostly living in the past.  Still, there are much better conferences for Advisors to spend their money on, but if you are in the DC area in June and have the cash - the conference looks like a nice place to be for a few days.

I maintain the opinion that the NTSSA (or the NTSA) is protecting a business model that is no longer viable and not in the best interests of millions of school employees, but they're more than welcome to continue attempting to convince people of it.

Scott Dauenhauer CFP, AIF, MPAS