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The K-12 403(b) is broken.
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Dan's Blog

403bwise K-12 403(b) Plan Rating Project 📋

October 12, 2021

The number one question we have encountered in 20+ years of 403(b) advocacy is: Do I have access to a good, low-cost investment choice?

If you work in the private sector and have access to a 401(k), this is a pretty simple question. Generally, these types of employers offer one, vetted financial company. Research is easy. Imagine instead that you are a teacher with little to no understanding about the 403(b) and you encounter the following:

  • AIG Retirement Services (formerly VALIC)
  • American Century Services LLC
  • Americo Financial Life and Annuity Insurance Company/Great Southern Life Insurance Company
  • Ameriprise Financial Inc.
  • Ameriprise Financial/RiverSource
  • ASPire Financial Services
  • Brighthouse Life Insurance Company
  • CLS Investments, LLC
  • Equitable Financial Life Insurance Company
  • FAM Funds
  • Fidelity Security Life Insurance Company
  • FinPath 403(b) Plan
  • First Investors/Foresters
  • Franklin Templeton Investments
  • Global Atlantic (issued by Commonwealth)
  • GLP & Associates
  • Horace Mann Investors, Inc.
  • Horace Mann Life Insurance Company
  • Horace Mann Retirement Advantage
  • Industrial-Alliance Pacific Life Ins Co, US Branch
  • Invesco (formerly OppenheimerFunds)
  • IPX (FPS Group)
  • ISC Group, Incorporated
  • Lincoln Investment, LLC
  • Lincoln National Life Ins Co (Lincoln Financial Group), The
  • Metropolitan Life Insurance Company
  • Midland National Life Insurance Company
  • Modern Woodmen of America
  • National Life Group through member company Life Insurance Company of the Southwest
  • New York Life Insurance & Annuity Corp.
  • North American Company for Life and Health
  • Orion Portfolio Solutions (formerly FTJ FundChoice LLC)
  • Pentegra Retirement Services
  • PFS Investments Inc
  • PlanMember Services Corp
  • Primerica Financial Service
  • Putnam Investments
  • Randolph-Brooks Federal Credit Union
  • Security Benefit
  • Symetra Life Insurance Company
  • The Legend Group, A Lincoln Investment Company
  • Thrivent Financial (Thrivent Financial for Lutherans)
  • USAA Insurance Company
  • USAA Mutual Funds
  • Vanguard Investments
  • Voya - ReliaStar Life Insurance Company
  • Voya Retirement Insurance and Annuity Company
  • Waddell & Reed, Inc

Abilene, Abilene: Not One of the Prettiest Vendor List We Have Seen

The above is an actual 403(b) vendor list from the school district in Abilene, TX. They say everything is bigger in Texas. Bigger in this case is not better. This vendor list is so bad it makes you want to rewrite that famous George Hamilton IV song...

Abilene, Abilene
One of the ugliest vendor lists we have ever seen
Filled with vendors who can treat you mean
In Abilene, poor Abilene

Not An Outlier

If only Abilene ISD was an outlier. It’s not. Even more troubling is the fact that there are far worse, albeit, smaller vendor lists. The K-12 403(b) plan is a mess. It is failing teachers and school district employees. Many new to the K-12 403(b) are shocked to learn how bad it is. It's time everyone knows. 

Sunshine is the Best Disenfectant 

Several months ago we began gathering school district vendor lists in an effort to shed light on the investing burden faced by school employees. There are 14,344 school districts in the country. To date we have vendor data for close to 4,000 school districts. This represents close to 28% of all school districts. We are adding vendor lists daily. 

Assigning Grades

We also created an A-F rating system. Given the complexities of the K-12 403(b) assigning a grade can be challenging. For example, a few quality vendors can be burried with dozens of high-cost vendors. This is the case in Abeline where there are actually a couple of decent choices: ASpire Financial Services (which provides access to Fidelity and Vanguard), USAA and Security Benefit (which offers NEA Direct Invest; note that other Security Benefit products are high cost). Read: When Bad 403(b) Vendors Offer Good Investing Choices. The challenge for employees unwise to the 403(b) is that they all too often fall for the sales agent in the staff lounge pitching high-cost products. Consider this grading system version 1.0 which we will adjust and adapt as necessary.

The Minimum Every School District Can Do

  • Every K-12 employee should have access to both unbiased information and at least one quality, low-cost investment choice
  • Schools should ban sales agents from selling products on campus and marketing via teacher email in boxes

What School Districts That Care Should Do

  • Every school district in the country should do what the 401(k) world does (and one large school district just outside of Washington D.C.) has done: Put its plan out to bid in order to get the best mix of pricing and services. Montgomery County Public Schools in Maryland is one of the few K-12 employers who did just that and now their employees have one excellent vendor for both their 403(b) and 457(b): Fidelity Investments. Even better: exactly zero 403(b) sales agents trawl MCPS lounges and email boxes. 

Note: to date, we have only graded about 75 school districts. Currently, each grade must be entered manually.  Going forward, we will grade each new district vendor list that we add. If your district is in our database but has not yet received a grade, a prompt will appear allowing you do submit a grade request. 

Search the 403bwise School District Vendor Database

Our database is now live. You begin by searching first for state and then by school district name. If the district you are searching for is not available you will be given an option to add the information.


Stay wise and well (and help us build out the database).