I hate to break it to you, but, the system for providing financial services and investments for teachers is antiquated and expensive!  Most school districts provide teachers with a list of at least ten “endorsed” 403(b) investment providers.  Eight of the ten are insurance company issued products and they, more or less offer THE SAME, products; fixed and variable annuities!  And, most of the products you buy through these insurance companies come with a very high price tag – namely high annual operating expense charges or surrender penalties passed on to you, the investor.  If you are lucky, you have a direct seller (no-load) mutual fund company on the list.  But, you have to be comfortable with choosing and monitoring your own investments which very few teacher are.  The final company on the list is the same company that has been endorsed by PSEA since 1974.  They provide Pennsylvania school districts with their 403(b) administrative templates so each district doesn’t have to create their own.  And, this company conveniently offers their own products which is where they make their real money.

The present system is full of duplication and fraught with all kinds of conflicts of interest.  It needs to be changed and move out of the 1970’s to the transparent 2010’s!  But, how should the system be revamped?  Next weeks blog post will offer some suggestions!



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