Author Topic: 403b - new provider  (Read 768 times)

slugsworth

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403b - new provider
« on: December 16, 2021, 04:09:01 PM »
Well, my employer is getting rid of vanguard and signing us all up for a higher cost provider. The cheapest index fund we had access to was 0.04% and now it is 0.15% but the kicker is we went from basically no administrative fee to 0.95%.

Is there a way for me to roll my existing balance over to an IRA without separating from the company? I'm under 59.5.

Chris @ Saturday Financial

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Re: 403b - new provider
« Reply #1 on: December 17, 2021, 10:52:40 AM »
You new plan might allow an in-service rollover to an IRA. Here's some more info, including some questions you can ask the new plan administrator:

https://www.investopedia.com/terms/i/inservicewithdrawal.asp

slugsworth

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Re: 403b - new provider
« Reply #2 on: December 17, 2021, 01:40:36 PM »
Thanks, it seems like the rules for 403b's are a little tougher. I'm hoping some creative mustachian can give me some ideas I haven't thought of.

https://www.lordabbett.com/en/perspectives/retirementperspectives/in-service-distributions-accessing-retirement-plans-while-employed.html

roomtempmayo

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Re: 403b - new provider
« Reply #3 on: December 18, 2021, 08:38:18 AM »
@slugsworth Over 1% annually for passive investment is insane.

Is your 403b managed by a committee?  If so, can you get yourself on it?

If not, there are some standards for fees in 403b plans, although I don't know the specifics off the top of my head.  Hopefully someone will be along to fill them in. 

cool7hand

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Re: 403b - new provider
« Reply #4 on: December 18, 2021, 08:45:42 AM »
This happened to us Pre-Fire. The admin would not allow us to transfer the 403b pre-separation. So, we established a relationship with the rep, showed our history of making maximum contributions per year, ceased all contributions because of the increase, and renegotiated the admin fee down to 50 basis points before we'd contribute again. We weren't happy about it, but 50 basis points was a better option. We thought it made sense in our situation because of the importance of reducing our taxable income pre-Fire. It also worked in our situation because a good chunk of the future basis points went into the rep's pocket. I hope this helps!

slugsworth

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Re: 403b - new provider
« Reply #5 on: December 18, 2021, 06:03:04 PM »
@slugsworth Over 1% annually for passive investment is insane.
Yep, fully agreed. . . And to add some salt to the wound, I have access to vtsmx right now and will have to settle for S&P500 unless I want to add some other funds.

Re: committee, nope!

I think this is entirely the result of a bug in the butt of our CEO, who worked with this high cost firm in the past. I'll suggest a committee.

The whole thing is pretty disappointing. Why does someone leave Vanguard?!?

slugsworth

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Re: 403b - new provider
« Reply #6 on: December 18, 2021, 06:16:16 PM »
It also worked in our situation because a good chunk of the future basis points went into the rep's pocket. I hope this helps!
Wow, thanks for the story! I wouldn't have thought it was negotiable. I do think the salesman is salaried, which is a good thing.  The first thing I asked him was if he was a fiduciary, which he said yes to.

I'm any case I was thinking of dropping my W2 employment and becoming a consultant and setting up a solo 401k. Thoughts?

 

Wow, a phone plan for fifteen bucks!