12.11.19
Hidden Payments and Costly Plans Dent Teachers' Retirement Savings
by: Gretchen Morgenson; Anne Tergesen
Opaque financial ties exist between some administrators hired by school districts for their teacher 403(b) plans and the companies whose investment products those administrators promote, the Wall Street Journal found, encouraging administrators to promote higher-fee investments. The findings come as the SEC seeks information from companies marketing retirement-income products to teachers and from those providing administrative services, some of which charge annual fees on top of money management fees. In addition, more than half of the assets in 403(b) plans are invested in annuities, according to a report from ICI. Annuity buyers can pay as much as 3 percent of invested assets in fees each year; fees on 401(k) accounts average less than 1 percent. Nationwide, 403(b) plans held $1.06 trillion in assets at the end of the second quarter, according to data from ICI.
Read the full article on Wall Street Journal