So, I work for a nonprofit, and we have a 403(b) plan with no company match. Our provider is MetLife, and the only products we can choose from are annuities. I'm almost 100% certain that everyone participating is investing in variable annuities. I will admit that when I signed up two years ago with our MetLife rep/broker, I didn't dig into what the plan was at all. I'm sure that the rep must have mentioned the word "annuity," or that it appeared on the contract, but I thought I was just investing in mutual funds.
Having dug into it now, I'm convinced we're getting a terrible deal. So far, the fees I can track down for my portfolio (and I'm sure there are more, scattered across bits of PDFs hidden on their terrible, incredibly hard to navigate website) are already over 2%. If we leave the organization, we can't roll the money over into an IRA without paying a hefty surrender fee. And while I'm far from a sophisticated investor, I'm amazed at how difficult it is to understand anything in their prospectuses and find basic information, like what the full range of fees we're paying.
I asked my boss why we chose MetLife. His answer? "I'm not sure. I think they're the only ones who responded to our RFP." I then asked him about how he felt about only being able to invest in annuities. He said, "Wait, what? We have annuities?"
*headdesk*
Our conversation (this was last night) was cut short because he had to get on a conference call, but it's clear to me that zero thought was put into selecting MetLife and that very few people are even aware that we're all invested in variable annuities instead of directly into mutual funds.
The higher-ups that I need to convince to switch providers are not finance, math, or investing people. I can already see the VP's eyes glaze over as I talk about expense ratios. How should I present my argument? Can I just point him towards the countless articles that talk about how variable annuities are generally a poor retirement vehicle? Show him the chart at the bottom of
http://www.403bwise.com/wisemoves/fees.html? Make my own chart?