The New York Times has been running a very informative series of articles on teacher retirement investments and 403(b)s.
The thrust of the stories is that 403(b)s suck. They have higher fees and have smaller returns than even 401(k)s.
Accounts of this type, which are like 401(k)’s for nonprofit employees, educators and many hospital workers, often come with high fees and problematic investments, as Tara Siegel Bernard and I documented in our Public Sacrifice series last year.
In his column Your Money in today’s Times, Ron Lieber writes:
We have essentially forced some of the people who do the most good in the world to turn themselves into part-time plan administrators who do annuity and mutual fund prospectus-reading on the side. Or at least that’s what they need to be if they want something better for themselves.
The law needs to be changed in order for teachers to have better choices. And our unions and employers should stop aiding and abetting retirement theft.
And the system has tried to turn people like me into pimps for the investment industry.
Let me explain briefly.
Before I retired and was an unpaid, no-release time local union leader, I would receive requests from the union and annuity companies to arrange lunch-time visits for annuity sales people. These companies had made deals with the union in order to be recommended to members.
No way was I doing this. I told them they could contact the district administration and arrange for a time to come. But it was not my job.
Thinking back, I wish I had known more. I would have been more pro-active.
And by the way, the district itself had also only approved annuitant companies. I wonder how that worked.
But as the Times articles point out, these companies which push 403(b) plans clearly represent only the interest of the investment companies and not the teachers.
They wanted me to schedule a time, round up teachers, put up posters and put flyers in teachers’ boxes.
Pimp for them.
I told them no.
They told me it was my responsibility as a union president.
I won’t tell you what I said in return.