Should I have made More?

[jondoejag2]

If this is not allowed, feel free to remove it.

I have had a 457 plan with ICMA for the last 22 years through the city I work at. I have contributed $90,000 into that plan over the last 22 years. I currently have $133,000 in it. ICMA is a non profit but is charging 3-15 times the national average in maintenance fees. We were told if we followed their plan, we would have hundreds of thousands of dollars in our plans by this point in time. Do I have any options? 

[WCC]

"should I have made more?" - that question cannot be answered with only the details in the post. This depends on risk/reward, risk tolerance, your investment goals, deposit timing, which investment options you have access to, etc.

"do I have any options?" - if you think you were harmed or received bad advice, you can start by voicing your concerns to your employer. Ask them their opinions. If you don't receive satisfactory answers from them or your service providers, then you could seek outside professional help from a qualified plan consultant or an attorney. 

[ESOP Guy]

One of the things you might want to do is look to see how the funds you were invested in did compared to a relevant index or if they are a common fund vs published ROR.  Just see if there are a bunch of years were there seems to be a large gap between the ROR of the fund and the benchmark.  This isn't conclusive but if your ROR and the benchmark are close then it might point to the idea it was fund choice or investment strategy.  If there benchmark and your fund seem to have a large gap it might be fee related. 

You need more data then you seem to have at this point. 

[jondoejag2]

I really know very little about investing and that is why I went with the 457 plan. When we were all told about this plan, it was explained to us that if we followed their investment strategies with ICMA and kept increasing our money going into the account, we would have a very sizable nest egg at this point in time. I did follow their plan, even when it seemed to be losing money. People kept telling me to leave it alone and keep with it because it would rebound. It didn't. I only found out last year, when I kept contacting them about the lack of money in the account, that they do not actually manage the account and that account management was up to us. They only align the account how we want them to as far as high risk, moderate risk, or low risk. It turned out that our city also entered into an agreement with ICMA that made it so we couldn't transfer any of out funds into another company, such as Vanguard. I went to Edward Jones investment company and asked them to look at my account and they were the one's who showed me the extravagant "maintenance fee's" ICMA had been charging, which was several times the national average on fees charged for those same funds. They think the city had a fiduciary responsibility to look after our accounts and make sure we weren't being overcharged on fees by ICMA. I brought this up to the city 2 years ago. Nothing has changed. The money in my account is still basically the same as it was 2 years ago. I looked at the "rule of 72" and believe I should have much more in my account. There were several years I was earning -9% for the year with ICMA. Edwards Jones representative and Vanguards representative said those same years should have been earning13%. Right now, when I pull the money out and pay taxes on it, I will have less than I put into the account to show for over 22 years of investing.

[Bird]

"Low" returns could be function of high fees, or conservative investments, or poor investment management.  If you're in a bond fund, even partially, you can't compare your returns to the S&P 500 index.  But if you put in 90K and only have 122K after 22 years (and the same as you had 2 years ago) then it is fair to say there is some kind of a problem.

I kind of suspect that the problem is indeed high fees, but just saying that your fees are 3-15 times the national average doesn't really give us any useful info.  Maybe provide a fund name and the fees on it and we can answer better.

[jpod]

You will have less than you put in only because you didn't pay tax on the money you put in.  Your posts are not that clear, but if your annual contributions increased over the 22 years so they are back-weighted, I'm not so sure you're $43,000 in gains is so terrible. 

[jondoejag2]

Thank you. I will add some of the funds and costs soon. If $43,000 in gains, before taxes, over 22 years is not so bad, then what  is the point in investing if you're going to wind up with less than you put in? I could have just done a savings account on my own with no fees and no hassles, which is basically what my 22 years of investing in a 457 plan has wound up being. If that's all a 457 plan is, then there is no point in having them because mine absolutely SUCKS. At least if it were buried in my yard, I could have taken some out whenever I wanted to. Put $90,000 in, earn $43,000 while the money is tied up over 22 years, and when I draw it out, I will have $87,000 after taxes. That's not much of an investment!

[Belgarath]

But, as Jpod suggested above, you had the benefit every year of spending the tax saving of income taxes that you would have otherwise paid to the government.

I'm not suggesting that it was a good investment, nor suggesting that it was a bad one. I'm merely suggesting that your logic is flawed. Ultimately, you may be absolutely correct that was invested poorly. Unfortunately, short of legal action (expensive, and you may lose!) it is water under the bridge at this point.