403(b) for Schools

[joel]

Joel: You can take your issues to the NJ attorney general. There is no reason for taxpayers to subsidize a 457 plan.

mgb: You are all mixed-up! All fees are paid by the paricipants...the taxpayer pays ZERO! Any increase in fees is paid by the participant.

Can you now think of a viable reason for the state's decision to farm out the plan to Prudential Financial?

[Don Levit]

mjb:

Thanks for your reply.

Would there be any state guarantee for DC funds, if part of the contributions were matched by the school districts?

Also, if retiree health benefits do not vest, why would the state have to guarantee them?

Don Levit

[Guest mjb]

Don- in NJ retiree health benefits vest after 5yrs of svc . State is on the hook when ee reaches retirement age.

[Guest yanfan]

Hi Joel,

Thanks for taking the time to respond. Do you know if transfers from another 403b plan can be made into the SACT plan in NJ (90-24) ? Also, do you think this type of fund is a better choice than a Vanguard index fund for the long term?

Thanks again.

John

[joel]

Don- in NJ retiree health benefits vest after 5yrs of svc . State is on the hook when ee reaches retirement age.

A retiree must have worked 25 years as a public employee in NJ in order to have free health insurance.

Joel

[Don Levit]

Joel:

Thanks for your reply.

I am much more familiar with private sector retiree health benefits than those in the public sector.

Every court case I have seen discusses whether health benefits vest or not.

Not one case that I can recall refers to vesting of how the benefits are paid for.

Is anyone familiar with any case in which the employer not only had to provide lifetime benefits, but also had to pay for the benefits in full?

Don Levit

[Guest mjb]

According to published reports, in 2003 the Alaska Supreme court ruled that the legislature could not reduce state provided retiree health benefits that had been promised to retired state workers which resulted in the legislature substituting a DC retirement plan and health reimbursement plan for the state DB plan for new hires beginning 2006.

[Don Levit]

mjb:

Sounds interesting.

Can you provide the names of the parties?

Don Levit

[Guest mjb]

no- I dont know any more than what was is in my previous post. Most state constitutions have provisons that prohibit cut backs of accrued benefits or even reduction for future benefit accrual for public employees. NY has a prohibition against reducing benefits for public employees that requires creation of separate groups for new employees every time there is a change in benefits for public employee.