Author Topic: What to do with 457 plan  (Read 2815 times)

cornbread

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What to do with 457 plan
« on: August 14, 2015, 08:19:21 PM »
Hi all,

A bit of advice needed:

I left a job after 20 years and still have the 457 plan with the employer/Voya.  I tried requesting for the % charged for managing account and they kept telling me the % is what is listed with each of the funds.  But I'm not so sure.  I think they charge an additional % for managing the account itself.  Since the $$ in account is pretty substantial (been maxing since day one), I need some advise either how to phrase the question to the financial institution or just roll it over to Vanguard.  The disadvantage is that if I do that, I lose the benefit of withdrawing $ from it w/o penalty.

Thanks in advance.

MDM

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Re: What to do with 457 plan
« Reply #1 on: August 14, 2015, 08:38:56 PM »
Are the funds publicly traded?  Do the publicized fees match what you see for the funds in your account?

If so, now that you are no longer contributing, it should be relatively easy to compare the returns in your account to public information from Morningstar on those funds.  If they match, and you don't see any charges in your account, then there is no additional % for managing the account itself.

mrpercentage

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Re: What to do with 457 plan
« Reply #2 on: August 14, 2015, 08:50:35 PM »
What they are saying is probably true. 457's are a very rare breed of pure badassity. I see no administration fees, low fees, no sales charge, better elections, and access to your funds without penalty the moment you quit your job. This is beginning to usurp my whole investing strategy. I can even roll my pension into it if I chose to leave and have instant access with no penalty. I wouldn't, I would watch it grow but I could.

TomTX

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Re: What to do with 457 plan
« Reply #3 on: August 16, 2015, 06:07:32 AM »
457 plans are awesome for the early retiree. Once you leave that employer you can make withdrawals with no penalties.  No age limits!

cornbread

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Re: What to do with 457 plan
« Reply #4 on: August 16, 2015, 11:35:26 PM »
Sounds like it'll be good to keep the 457 plan.  I can use it to bridge the gap between now and when pension kicks in.

Thanks!

CorpRaider

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Re: What to do with 457 plan
« Reply #5 on: August 17, 2015, 09:21:11 AM »
I've seen plans that build in the administrative fee they charge into the quoted expense ratio for the funds offered.  Prudential, for example, does that.  So it might be true that the ER quoted includes everything.  You can probably find it broken out if you nose around on the plan site, maybe even as a footnote at the bottom of the information sheets for the various funds.

BarkyardBQ

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Re: What to do with 457 plan
« Reply #6 on: August 17, 2015, 09:41:42 AM »
For DW's 457, Voya charges .19% additional expense for investing in the Vanguard funds. We use the TD Ameritrade option and transfer through Voya and invest in commission free Vanguard ETFs at TD. The fixed fee for the SDBA is better than the additional expense ratio.

DavidAnnArbor

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Re: What to do with 457 plan
« Reply #7 on: August 17, 2015, 05:07:04 PM »
I also have a 457 plan with Voya (formerly ING) through the state of Michigan because I'm a part time government employee.

I'm charged a quarterly fee of $10.25.

The passively managed index funds available are a State Street Global Advisors(SSgA S&P 500 Index -  .03%, SSgA S&P MidCap Index and SSgA Russell 2000 Index both at .06% fee.  To find out the mutual fund fees was a cumbersome process on the Voya website, which overall is fairly poor and not intuitive.

The other fee charged by my Voya state of michigan 457 plan is when you go to make a withdrawal. If you make a partial withdrawal the fee is $25, and if you completely close out and transfer all your money out of Voya to be rolled over to another IRA it is $75.  If you create an Installment plan, whereby you are separated from the employment, and of the correct age, then you can get periodic payments without any fee. Also when you are 70.5 years of age and forced to receive the Required Minimum Distribution payments - there will be no $25 fee.