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
www.meridianwealth.com
Tuesday, January 23, 2007
Friday, January 19, 2007
Plan Sponsor: Revenue Sharing
Magazine Articles [PLANSPONSOR.com]
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
www.meridianwealth.com
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
www.meridianwealth.com
Tuesday, January 16, 2007
News Articles [PLANSPONSOR.com] - FL Pension Plan Accuses ING of Revenue Sharing Fraud
News Articles [PLANSPONSOR.com] - FL Pension Plan Accuses ING of Revenue Sharing Fraud
This is why I don't believe revenue sharing should be used in DC plans.
Scott Dauenhauer, CFP, MSFP, AIF
This is why I don't believe revenue sharing should be used in DC plans.
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 for.....in 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
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 for.....in 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
Wednesday, December 20, 2006
ICI Comment Letter to IRS on Efforts to Simplify 403(b) Rules, February 2005#TopOfPage
ICI Comment Letter to IRS on Efforts to Simplify 403(b) Rules, February 2005#TopOfPage
ICI Comment Letter.........
Scott Dauenhauer, CFP, MSFP, AIF
ICI Comment Letter.........
Scott Dauenhauer, CFP, MSFP, AIF
SIA Lobbying Letter to Treasury
403(b) proposed regulations - Google Search
It seems nobody in the industry likes the new regs. Perhaps it is because they know that under the new regs the "wild, wild, west" mentality will begin to be tamed.
Scott Dauenhauer, CFP, MSFP, AIF
It seems nobody in the industry likes the new regs. Perhaps it is because they know that under the new regs the "wild, wild, west" mentality will begin to be tamed.
Scott Dauenhauer, CFP, MSFP, AIF
ASBO Lobbys the IRS
403(b) proposed regulations - Google Search
Some additional interesting information from another oranization lobbying to change some of the proposed regulations.
Scott Dauenhauer, CFP, MSFP, AIF
Some additional interesting information from another oranization lobbying to change some of the proposed regulations.
Scott Dauenhauer, CFP, MSFP, AIF
Annuity Industry Begs IRS - Will They Succeed?
D & H
The annuity industry is not happy about the proposed 403(b) regulations and they are making themselves heard. In June of this year their lobbyist send a letter to treasury requesting a new delayed effective date and special grandfathering rules that appear to benefit the industry.
It looks like they got their first wish, the effective date has been pushed to January 1st, 2008. However there has not been any talk about a grandfathering clause.
Stay tuned.
Scott Dauenhauer, CFP, MSFP, AIF
The annuity industry is not happy about the proposed 403(b) regulations and they are making themselves heard. In June of this year their lobbyist send a letter to treasury requesting a new delayed effective date and special grandfathering rules that appear to benefit the industry.
It looks like they got their first wish, the effective date has been pushed to January 1st, 2008. However there has not been any talk about a grandfathering clause.
Stay tuned.
Scott Dauenhauer, CFP, MSFP, AIF
Thursday, December 14, 2006
CA braced for teacher retirement boom
Global Pensions
California Teachers are going to be retiring in mass over the next five to ten years.
ScottyD
California Teachers are going to be retiring in mass over the next five to ten years.
ScottyD
Wednesday, December 13, 2006
CalPERS panel urges rate boost
Politics - CalPERS panel urges rate boost - sacbee.com
When I first started in the business of working with educators I can across the CalPERS Long Term Care program and generally liked it. I even recommended it because the premiums were so low.
However, as I learned more about long term care insurance and learned more about the CalPERS plan I began to recommend that clients buy a policy from a private insurer. My reasoning was that CalPERS was not charging enough and that they would have to raise premiums at some point, in addition, they are not an insurance company and are required to abide by the same rules that govern insurance companies. I didn't like the lack of safeguards nor the fact that premiums would have to increase.
I thought CalPERS was basically attempting to buy the business with low premiums. I want to make clear that I am not accusing CalPERS of market manipulation. I actually believe their intentions were sincere and they thought their policies were priced appropriately.
The fact remains that I am not an actuary, yet I knew several years ago that the premiums would have to rise, sure enough in 2003 CalPERS raised the premiums by an average of 17%.
Even after the premium raise I remained skeptical, and still do. Now CalPERS is proposing to raise the premiums by nearly 34%. This means that for every $100 in premiums, policyholders will be paying $57 more than they were paying in 2002, a 57% increase. Had policyholders known this they may have opted for a private insurance policy that was more expensive at the time, but provided better benefits and a better future in terms of rate increases.
I want to make something very clear - I do not sell Long Term Care Insurance and I don't recieve any money from the insurance industry or insurance agents. I don't have a vendetta against CalPERS because I lost insurance sales, I am just concerned for the public employees who purchased this policy in good faith.
It is my opinion that CalPERS is in over its head and needs to reform the Long Term Care Insurance Plan. My advice is that they do not institue the 34% increase yet, instead they embark upon a plan where they outsource their long term care program to a private insurer and continue to sell it as a private labeled plan. The private insurer chosen can then put together an accurate assesment of the real costs and a discussion of rate increases can continue. I believe rates must be increased, but I don't feel comfortable with the management of this plan by CalPERS.
Just my two cents...
Scott Dauenhauer, CFP, MSFP, AIF
When I first started in the business of working with educators I can across the CalPERS Long Term Care program and generally liked it. I even recommended it because the premiums were so low.
However, as I learned more about long term care insurance and learned more about the CalPERS plan I began to recommend that clients buy a policy from a private insurer. My reasoning was that CalPERS was not charging enough and that they would have to raise premiums at some point, in addition, they are not an insurance company and are required to abide by the same rules that govern insurance companies. I didn't like the lack of safeguards nor the fact that premiums would have to increase.
I thought CalPERS was basically attempting to buy the business with low premiums. I want to make clear that I am not accusing CalPERS of market manipulation. I actually believe their intentions were sincere and they thought their policies were priced appropriately.
The fact remains that I am not an actuary, yet I knew several years ago that the premiums would have to rise, sure enough in 2003 CalPERS raised the premiums by an average of 17%.
Even after the premium raise I remained skeptical, and still do. Now CalPERS is proposing to raise the premiums by nearly 34%. This means that for every $100 in premiums, policyholders will be paying $57 more than they were paying in 2002, a 57% increase. Had policyholders known this they may have opted for a private insurance policy that was more expensive at the time, but provided better benefits and a better future in terms of rate increases.
I want to make something very clear - I do not sell Long Term Care Insurance and I don't recieve any money from the insurance industry or insurance agents. I don't have a vendetta against CalPERS because I lost insurance sales, I am just concerned for the public employees who purchased this policy in good faith.
It is my opinion that CalPERS is in over its head and needs to reform the Long Term Care Insurance Plan. My advice is that they do not institue the 34% increase yet, instead they embark upon a plan where they outsource their long term care program to a private insurer and continue to sell it as a private labeled plan. The private insurer chosen can then put together an accurate assesment of the real costs and a discussion of rate increases can continue. I believe rates must be increased, but I don't feel comfortable with the management of this plan by CalPERS.
Just my two cents...
Scott Dauenhauer, CFP, MSFP, AIF
Changing 403(b) Plans for Changing Times
A good friend and colleague of mine, Barbara Healy helped pen this piece about the what to expect and how to proceed in the new world of 403(b). Everybody who is a decision maker of a 403(b) plan should read this.
Scott Dauenhauer, CFP, MSFP
Scott Dauenhauer, CFP, MSFP
Reproduced with permission from the Benefits & Compensation Digest, Volume 43, No. 12, December 2006, pages 1, 19-23 published by the International Foundation of Employee Benefit Plans (www.ifebp.org),
Thursday, November 30, 2006
What's a Plan? Gray v. Prudential
403(b)-457 Plans Blog: What's a Plan? Gray v. Prudential
The typical teacher will not find this linke of interest, but those in the 403(b) marketplace and district plan administrators will.
ScottyD
The typical teacher will not find this linke of interest, but those in the 403(b) marketplace and district plan administrators will.
ScottyD
Monday, November 27, 2006
School District Goes Extra Mile to Disclose Fees
School District Goes Extra Mile to Disclose Fees | workforce.com
Contrast this article with the last one (from Florida). At least LAUSD is disclosing revenue sharing. The next step is to completely eliminate it.
ScottyD
Contrast this article with the last one (from Florida). At least LAUSD is disclosing revenue sharing. The next step is to completely eliminate it.
ScottyD
FL Sheriff Sues Nationwide Over Fees
News Articles [PLANSPONSOR.com] - FL Sheriff Sues Nationwide Over Fees
Revenue sharing is a standard practice in the industry, that doesn't make it right. It is my belief that all fees should be disclosed AND who recieves those fees. In addition those fees should be benchmarked and evaluated annually.
The reason revenue sharing is so prevalent is because most vendors DON'T want the participants to actually see the fees being paid to the vendor, if they did they would freak out.
My belief is the fees should be explicit, employees should see them and they should be educated as to what the fees are.
ScottyD
Revenue sharing is a standard practice in the industry, that doesn't make it right. It is my belief that all fees should be disclosed AND who recieves those fees. In addition those fees should be benchmarked and evaluated annually.
The reason revenue sharing is so prevalent is because most vendors DON'T want the participants to actually see the fees being paid to the vendor, if they did they would freak out.
My belief is the fees should be explicit, employees should see them and they should be educated as to what the fees are.
ScottyD
Monday, November 20, 2006
Teachers, did you forget to do your homework on 403(b) plans? | The San Diego Union-Tribune
Teachers, did you forget to do your homework on 403(b) plans? | The San Diego Union-Tribune
Lynn O'Shaughnessy keeps poor 403(b) options in the spotlight with this timely article on why teachers need to do their homework on 403(b) plans if they want to maximize their retirement plans.
Great Job Lynn.
Scott Dauenhauer, CFP, MSFP
Lynn O'Shaughnessy keeps poor 403(b) options in the spotlight with this timely article on why teachers need to do their homework on 403(b) plans if they want to maximize their retirement plans.
Great Job Lynn.
Scott Dauenhauer, CFP, MSFP
Monday, October 30, 2006
On Stuff: William Bernstein
On Stuff
My favorite author, Dr. William Bernstein gives us the low down on Commodities and their place (or mis-placement) in a portfolio.
Scott Dauenhauer, CFP, MSFP
My favorite author, Dr. William Bernstein gives us the low down on Commodities and their place (or mis-placement) in a portfolio.
Scott Dauenhauer, CFP, MSFP
Monday, October 23, 2006
Firm to disclose savings plan fees - Los Angeles Times
Firm to disclose savings plan fees - Los Angeles Times
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A union has finally stood up and protected its teachers. The United Teachers of Los Angeles, led by an outspoken teacher has forced AIGVALIC's hand in disclosing fees that they did not want disclosed.
While this plan is not perfect, it is good to know that a union and its members are standing up for what is right, perhaps this watershed moment will lead to even more in this long fight for participant rights and transparency.
Scott Dauenhauer, CFP, MSFP
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A union has finally stood up and protected its teachers. The United Teachers of Los Angeles, led by an outspoken teacher has forced AIGVALIC's hand in disclosing fees that they did not want disclosed.
While this plan is not perfect, it is good to know that a union and its members are standing up for what is right, perhaps this watershed moment will lead to even more in this long fight for participant rights and transparency.
Scott Dauenhauer, CFP, MSFP
Wednesday, October 11, 2006
ING to Give Teachers Refunds
Kathy Kristoff updates us on the problems with the New York State Union 403(b) problems, it looks like their provider, ING will pony up $30 mill to settle claims it misled participants and didn't disclose backroom deals. Of course, ING will not be admitting any wrongdoing. NYSUT settled for about $3 million early this year. Another story on the topic can be found here.
Its amazing that the NEA Valuebuilder product has never been investigated, it is much worse (or at a minimum the same!).
ScottyD
Its amazing that the NEA Valuebuilder product has never been investigated, it is much worse (or at a minimum the same!).
ScottyD
Tuesday, October 03, 2006
Workers Get a Double Jolt on Pension Benefits
Another good primer on the Windfall Elimination Provision and the Government Pension Offset. If you are a teacher you MUST know about this in order to effectively plan for retirement.
Scott Dauenhauer, CFP, MSFP
Scott Dauenhauer, CFP, MSFP
Monday, October 02, 2006
New Jersey Teacher Wins Fight on Retirement Fees
John Wasik is 100% right on in this column, if you are in education (regardless of your position) you need to read this article.
ScottyD
ScottyD
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