joel

Demo: I could not agree with you more! mb: I was informed about this requirement from someone that is in a position to know. I will try to get the citatation and post it up.

NY law prohibits the use of annuities as a funding medium. This in my view recognizes the principle that the purchase of an annuity with pre-tax dollars is like using an umbrella indoors. Q.: Please identify the other states that have the same prohibition.

I also believe that since 403(b) Plans may terminate, but cannot rollover the 403(b) assets into a 401(k) Plan there is not much benefit to terminate the plan b/c the regs are cumbersome. If I recollect correctly, the regs have been monsterous since ERISA... ===================================================== Empower: Erisa 403(b)s and non-erisa 403(b)s may not terminate until the 403b Regs are finalized which should be for plan years beginning after 12/31/05. Currently an eligible rollover distribution from a 403(b) can be made to a 401(k).

Actually, Joel, I'm too busy marshalling forces to prepare written comments to the IRS in protest of much of the content of the proposed regulations (many of which have no statutory authority) to stop long enough to figure out what you are saying. ===================================================== Actually, Ms. Lowder, I am taking some time from my busy schedule to suggest to you that rather than telling us that you can't spare enough time to figure out what I am saying that you say nothing until you do have enough time to figure out what I am saying. Peace and Hope, Joel L. Frank

Kirk, That's because they are underpaid.

George, You may want to check this out as well: http://www.403bwise.com/features/nysut_jlf.html Joel

Does anyone know of a compilation or source showing the best performing Mutual Funds which are popular in the 403(b) arena? ===================================================== Hi George, The most popular funds/VA are rarely the best performers, i.e.; the Opportunity Plus Variable Annuity underwritten by ING which pays the NY State Teachers Union a $4 million dollar annual endorsement fee. This VA sports fees of about 200-300 basis points. Who pays this endorsement fee? The teacher/investor/union dues paying member!! Check it out at: http://www6.ingretirementplans.com/Sponsor...ents/index.html. ING has similar arrangements with teacher unions in other states as well. This is an example of what is going on in the k-12 403b area. It is a national disgrace. Peace and Hope, Joel

Tree, Hardship withdrawals are permitted but are limited to the amount needed to alleviate the hardship and may not include earnings. Ex: You contributed $5000 and the account is worth $6000. You document that you need $6000 to alleviate the hardship. The hardship withdrawal is limited to $5,000, the amount you contributed. You may want to default on the loan. If you do then the loan balance becomes a taxable distribution. So in essence you get some money out without documenting financial hardship. Lori, I stand corrected. Tree simply wants the account balance. I cannot detect if her contributions were stopped. I find it outrageous for her rep to advise her to take out a loan to pay off debt. This rep should be fired! Was tree informed of the restrictions on in-service withdrawals prior to signing on? This should be disclosed at the point of sale. It is not enough just to hand the client a prospectus. Peace and Hope, Joel L. Frank

Lori: Your opinion is on target so long as the er includes no-loads on the investment platform. Adopt a 457(b) as well as the 403(b) and then the ee can max out on both. Peace, Joel L. Frank

I assume you fund your account via a salary reduction agreement. You have a shark for a ING rep. The law permits you to cancel your salary reduction agreement at anytime without restriction. ING is in violation of the law if they in fact told you, you have to take a loan in lieu of stopping contributions. THIS IS AN OUTRAGE!! He or she should have first advised you to stop making contributions. This would give you some more take home pay. If this did not do the trick for you you should have been advised to look into taking a hardship withdrawal which is a taxable distribution with the 10 percent penalty tax. Under the rules a hardship withdrawal would trigger a cessation of contributions automatically. YOU NEVER SHOULD HAVE BEEN ADVISED TO TAKE A LOAN BECAUSE THAT FORCES YOU TO MAKE TIMELY LOAN PAYMENTS----SOMETHING THAT YOU OBVIOUSLY CANNOT AFFORD TO DO. I would write a letter to the branch manager and tell him/her that you want to stop your contributions forthwith. PS: Your rep handled it this way because s(he) still wants those commission trails coming in every month and the hell with you and your financial welfare. Let us know how you made out. Peace and hope, Joel L. Frank

"I think the triggering event is the termination of the 403(b) plan." ================================================== Would this trigger require legislation because sections 403(b)7 and 403(b)11 do not include "plan termination" as a distributable or triggering event? Joel

QUESTION: IN THE EVENT OF PLAN TERMINATION AND THUS A DISTRIBUTION OF BENEFITS MUST THE EMPLOYEE SATISFY A TRIGGERING EVENT IN ORDER FOR THE DISTRIBUTION TO BE AFFORDED ROLLOVER TREATMENT? ===================================================== Doesn't anyone care to reply? Peace, Joel

mb: I have attempted to be deliberate in this dialogue by posting your quote and then placing my response in CAPS. Yet it is apparent that you refuse to respond directly to my rebuttals but simply restate, albeit using different words, your original position/post. I respectfully have to tell you that I find this quite frustrating. The NJ Division Pensions in addition to being the Administrator of the five DB PERS also is the Administrator of a DC Plan known as the Supplemental Annuity Collective Trust (SACT)---this is the statewide 403(b) plan that all eligible NJ public employees may contribute to. Its expense ratio (paid by the participants) is 10 bp. Its investment results are separate and distinct from the corpus of the 5 DB Plans because the 403(b) Plan offers individual funds for the personal investor. So your remarks that the Division has achieved less than stellar performance is irrelevant. Q.: After you review the offering of the SACT can you tell us if this statewide 403(b) Plan is a workable model for the other 48 states to follow. Moreover, have you had a chance to review the Investment Plan of the Florida Retirement System? Is this not a fine model for the "new" 403(b) plan? Have you had a chance to look at the 403(b) Trust that was established by the Wisconsin Education Association? And what about the Federal Thrift Savings Plan as a model for a 403(b) Plan? The point I am attempting to make is that the ers and ees do not have to be burdened/abused with an avalanche of retail stockbrokers decending on the workplace each business day to "sell" commissioned based annuities/mutual funds under the current 403b regs. And I was hoping that the "new" regs would be a major impetus for the vast majority of uncaring/selfish ers to follow the lead that was established many decades ago by the decision makers in NJ and Wisconsin. The NJ SACT program is not as popular as it could be because of many restrictions, so it is a minority 403(b) carrier among eligible publice employees in NJ. On the other hand the 403(b) Trust established by the Wisconsin Education Association is the major 403(b) carrier among eligible public employees in the state of Wisconsin. This is proof positive that the high cost Variable Annuities and mutual funds that are so prevalent throughout the country are sold and not bought. It is the rare individual that given a choice of high cost products and no-load products would choose the high cost variety. Peace and Hope and have a good Thanksgiving, Joel L. Frank

ARE YOU SAYING THAT THE CODE DOES NOT ALLOW FOR A 401(K) INVESTMENT MENU TO BE RESTRICTED TO INDIVIDUAL ANNUITIES/ACCOUNTS? ARE YOU SAYING THAT THE PROPOSED REGS DO NOT REQUIRE A PRUDENT INVESTOR RULE? SO IF IT WILL BE IMPOSSIBLE TO ADMINISTER WHAT IS THE PURPOSE OF THE PROPOSED REGS? IF ALL THE SD IN A PARTICULAR STATE COMBINE THEIR BUYING POWER INTO A SINGLE 403(b) PlAN THE COST FACTOR WOULD BE ELIMINATED. AS I SAID IN A PREVIOUS POST NEW JERSEY HAS OFFERED A STATEWIDE PLAN FOR MORE THAN FORTY YEARS. SO WHY DO ONLY A SMALL FRACTION OF 401(K)S OFFER THE VA? Edited by Appleby to add "quotes"

I will respond to your remarks in CAPS. Thanks for your views. Joel =================================================== Did you know that Van Guard charges $10 per fund per year in their 403(b) program? Did you know that T. Rowe Price charges $15 per fund in their 403(b) program? Many of these low cost providers are not low cost. Do you know that 401(k)s cost the employer thousands of dollars a year to administer? SO WHY DO THEY NOT TERMINATE THESE "EXPENSIVE" PLANS? Do you know that public 403(b)s have no administration cost billed to the employer? YOU CAN AFFORD TO BE CHARITABLE WHEN YOU CHARGE 200-300 BP. if a plan docs were needed and an administrator to handle the plan the admin costs would sky rocket. I agree with mbozek that many employers will get rid of 403(b)s if they need plan docs and the additional cost of an administrator. THE NYC 457(b) PLAN CHARGES THE EE/INVESTOR 34 BP WHICH INCLUDES THE PLAN'S $50 ADMINISTRATION FEE. WHY CAN'T THIS APPLY TO A 403(b) PLAN? 403(b)s are simple retirement plans. THEY ARE INDEED SIMPLE AND EXPENSIVE BECAUSE THEY ARE SOLD BY RETAIL STOCK BROKERS WHO MUST SELL IN ORDER TO MAKE A LIVING. Do you know that low cost providers are available in 403(b) plans but participants choose variable annuities because of the service and benefits? I LIKE ANNUITIES---THE LOW COST VARIETY IE TIAA-CREF WITH 3 BP FOR MORTALITY AND EXPENSE CHARGES NOT THE INDUSTRY AVERAGE OF 100 BP. THE "SERVICE AND BENEFITS" IS SIMPLY A SALES PITCH. EXCEPT FOR TIAA-CREF THE PURCHASE OF AN ANNUITY (FIXED OR VARIABLE) FOR PRE-TAX INVESTING IS LIKE OPENING UP AN UMBRELLA INDOORS. THIS HORRIFIC ABUSE IN THE 403(b) COMMUNITY WILL BE A THING OF THE PAST WITH THE ADOPTION OF THE PROPOSED REGS IN 2006. Do you know that school and non-profits choose what investments (403b1 or 403b7) are available in their plan. CURRENTLY THERE IS NO SUCH THING AS A NON-ERISA "403(b) PLAN". THIS IS WHAT THE PROPOSED REGS ARE ALL ABOUT. CURRENTLY WITH NON-ERISA 403(b) ARRANGEMENTS THE ER COULD NOT GIVE A HOOT AS TO THE TYPE OR COST OF THE INVESTMENT BEING SOLD TO ITS EMPLOYEES===THIS HANDS OFF APPROACH LEADS TO YOUR DESCRIPTION THAT IT IS A "SIMPLE RETIREMENT PLAN". IN ITS CURRENT FORM IT IS AKIN TO PURCHASING US SAVINGS BONDS ON THE PAYROLL DEDUCTION BASIS. I really don't get the hatred of variable annuities, if you don't like them invest in a 403b7. Ask you employer to add one to the vendor list. IF THE ER DID ITS DUE DILLIGENCE IT WOULD ALREADY BE ON THE VENDOR LIST. WHY IS IT THAT 403(b) IS THE ONLY RETIREMENT SCHEME THAT SPORTS A VENDOR LIST---THE LA SCHOOLS OFFER 80 VENDORS. WHAT COULD BE MORE ABSURD? COULD THIS BE A PRIMARY REASON FOR THE NEW REGS? I THINK SO. But adding administrative hassles to employer will not decrease cost but increase it

May I now suggest that we fucus our attention on the 403(b) message board where mbozek believes that the new 403b regs will force non erisa 403b plans to simply terminate. This topic is crying out for additional viewpoints. Joel

mb: You have basically re-stated your position. With all due respect you have not been attentive. I stated: MANY 403(b) ELIGIBLES DO NOT HAVE A Q PLAN AND USE THE 403(b) AS THEIR PRIMARY RETIREMENT PLAN. MOREOVER, MANY OF THESE ELIGIBLES ARE NOT "TEACHERS" AND COMMAND ANNUAL SALARIES WELL IN EXCESS OF $100,000. SO WHY SHOULD THEY BE LOCKED OUT OF THE HIGHER 403(b) CONTRIBUTION LIMITS? --------------------------------------------------------------------------------------------- I take issue with a couple of your assertions: 1. An employer doesn't offer IRAs---it is simply purchased by a qualified individual. 2. Most DB PERS that k-12 teachers belong to are contributory, ie NJ/NY/CA.---not non-contributory as you erroneously assert. 3. NJ requires 25 years of service (NOT FIVE AS YOU ASSERT) in order to get retiree health insurance. ONCE AGAIN YOU ARE SHOWING YOUR ANTI-PUBLIC EMPLOYEE BIAS. The new 403(b) Regs affect not only public school employees/colleges/universities but the entire 501©(3) community. And if HR 3718 becomes law the entire public employee workforce on the state and local level will be able to invest in 403(b) plans.

mb: I will respond in CAPS IN THE BODY OF YOUR POST. THANKS FOR YOUR VIEWS. Joel ===================================================== Joel: Where does 403b impose any investment duties on an employer? Even ERISA does not require that an employer offer no load funds. Imposing qualified plan requirements on 403(b) plan will result in termination of non ERISA 403(b) plans because of the liability risks to applicable to plan administrators under state laws and substitution of IRAs. I RECOGNIZE THAT FACT BUT YOU WOULD BE HARD PRESSED TO FURNISH THE NAME OF A 401(K) PLAN THAT LIMITS ITS INVESTMENT MENU TO COMMISSIONED BASED VARIABLE ANNUITIES/MUTUAL FUNDS. THE 457(b) IS ALIVE AND WELL NOT WITHSTANDING THE FACT THAT THEY MUST OPERATE UNDER A WRITTEN PLAN DOCUMENT. THE 403(b) WILL ALSO SURVIVE ESPECIALLY IF A STATE'S LOCAL SCHOOL DISTRICTS USE A STATEWIDE 403(b) PLAN. SUCH A PLAN HAS BEEN AVAILABLE FOR NJ SCHOOL DISTRICTS FOR MORE THAN FOUR DECADES AND IS ADMINISTERED BY THE NJ DIVISION OF PENSIONS/BENEFITS. Employees will be able to contribute 4k to an IRA in 2005 ($4500 if 50) and 5k in 2008 (6k if 50) which will be enough for most teachers. THANKS FOR LOOKING OUT FOR TEACHERS. YOUR ELITIST ATTITUDE IS NOTED In 2006 married couples will be able to participate in a Q plan and contribute to an IRA if their AGI is 75k or less (50k for single person). MANY 403(b) ELIGIBLES DO NOT HAVE A Q PLAN AND USE THE 403(b) AS THEIR PRIMARY RETIREMENT PLAN. MOREOVER, MANY OF THESE ELIGIBLES ARE NOT "TEACHERS" AND COMMAND ANNUAL SALARIES WELL IN EXCESS OF $100,000. SO WHY SHOULD THEY BE LOCKED OUT OF THE HIGHER 403(b) CONTRIBUTION LIMITS? IRA funds can be withdrawn at any time subject only to the 10% penalty tax and there are more investment options than there are in 403b plans. Employees will be able to transfer the entire 403b balance to an IRA upon termination and avoid all of those nasty fees that you complain about. NO RESTRICTIONS ON IRA WITHDRAWALS (SUBJECT ONLY TO THE 10 PERCENT PENALTY TAX) IS A POOR REASON TO CAN THE 403(b) IN FAVOR OF AN IRA. THE MUTUAL FUND UNIVERSE IS WHERE MOST PEOPLE INVEST BOTH INSIDE OR OUTSIDE OF PRE-TAX INVESTING. MOREOVER, AS YOU KNOW VERY, VERY WELL PRE-59 1/2 WITHDRAWALS FROM A 403(b) ARE EXEMPT FROM THE 10 PERCENT PENALTY TAX IF THE EE HAS TERMINATED EMPLOYMENT DURING OR AFTER THE YEAR S(HE) TURNED AGE 55. I DO NOT WANT TO TERMINATE 403(b) PLANS IN FAVOR OF EXTERMINATION AS YOU APPARENTLY FORECAST. I WANT THE SPONSOR TO DO THE RIGHT THING BY ITS EES. IN THIS REGUARD WOULD YOU PLEASE LOG ONTO THE FLORIDA RETIREMENT SYSTEM'S WEBSITE AND TELL US WHAT YOU THINK ABOUT THEIR "INVESTMEN PLAN". DO THE SAME FOR THE 457(b) PLAN OF THE CITY OF NEW YORK. AND WHILE YOU'RE AT IT TRY THE 403(b) Plan operated by the 403(b) Trust of the Wisconsin Education Association. PLEASE GET BACK TO US WITH YOUR THOUGHTS.

DH: How many books on President Lincoln have you read? Answer: read through some various stuff on King Lincoln. The best is Thomas DiLorenzo's The Real Lincoln. ==================================================== How much independent research have you conducted on President Lincoln?

There are three New York statewide systems and five New York Citywide systems. peace, joel

DH: How many books on President Lincoln have you read? Joel

And make sure the planner is not a salesperson. You may also want to post your question on Forum@yyyz.net. Let us know how you make out.

I have taken the liberty to post up a couple of quotes from an IRS website. I have placed my comments and a question in CAPS. Peace and Hope, Joel L. Frank ============================================= "And now, for the brand new highlights, foremost of which is that the proposed regulations require that a 403(b) program be maintained pursuant to a written defined contribution plan which in both form and operation satisfies 403(b) and contains all the terms and conditions for benefits under the plan." COMMENT: THIS IS GREAT NEWS. THE ER MUST NOW GET INVOLVED IN A MEANINGFUL WAY AND OPERATE THE PLAN MORE LIKE A "QUALIFIED PLAN" WHICH 403bs ARE NOT. THIS IS FANTASTIC NEWS FOR THOSE THAT WANT TO INVEST IN NO-LOAD FUNDS AND HAVE BEEN PRECLUDED FROM DOING SO BECAUSE THE ER WAS OUT TO LUNCH AND FRANKLY DID NOT GIVE A HOOT. WELL NOW SUCH ERS ARE COMPELLED BY LAW TO GET INVOLVED IN A MEANINGFUL WAY. "The proposed regulations provide that these plans may terminate and distribute assets with full rollover ability..." QUESTION: IN THE EVENT OF PLAN TERMINATION AND THUS A DISTRIBUTION OF BENEFITS MUST THE EMPLOYEE SATISFY A TRIGGERING EVENT IN ORDER FOR THE DISTRIBUTION TO BE AFFORDED ROLLOVER TREATMENT? "It is intended that Revenue Ruling 90-24, in-service plan-to-plan 403(b) asset transfers, be limited to situations where the employee is a participant of the receiving plan". COMMENT: AT FIRST GLANCE ONE MIGHT THINK THAT THIS PUTS A DAGGER INTO OUR DESIRE TO HAVE FLEXIBILITY. BUT I WOULD NOT BE TOO CONCERNED WITH THIS PROVISION IN LIGHT OF THE FACT THAT THE ER MUST ESTABLISH A WRITTEN 403(b) PLAN WHICH WILL GIVE US ALL THE FLEXIBILITY WE ARE ENTITLED TO. IN MY VIEW THE ER WILL BE IN VIOLATION OF THE REGS TO THE EXTENT THAT IT DOES NOT OFFER NO-LOAD FUND INVESTING. THE DAYS ARE GONE WHEN THE MENU ONLY CONSISTS OF HIGH COST VARIABLE ANNUITIES/MUTUAL FUNDS. "HELP IS ON THE WAY"

Question regarding 529's: if I setup an account on my older nieces' behalf, and it is not completely needed, can I transfer the remainder to my younger nieces' account without penalty? =================================================== How many nieces are we talking about? It appears that you have at least four, insofar as you place the ' mark after the letter s in neices. Please confirm. Joel

slware: Please get back to us and tell us how your 403(b) provider answered you after you told him/her that you may take withdrawals as often as you like and in any amount you like without the 10 percent penalty tax if you sever employment in or after the year you turn age 55. You may want to arm yourself with a copy of Internal Revenue Code section 72(t)(2)(A)(v) and tell him/her they will be in violation of the Code if they compel you to establish a SEPP in order to be exempt from the 10 percent penalty tax. We look forward to your reply. Joel