Educators to Equitable: Drop Dead!

August 2, 2022

On October 29, 1975, President Gerald Ford announced that the federal government would decline to intervene in the city of New York’s fiscal challenges. The next day The Daily News ran the all cap headline: FORD TO CITY: DROP DEAD! Never mind that the president never uttered those words, the sensational phrasing stands as one of the most remembered newspaper headlines in history. Ford cited it as one of the reasons he lost re-election. 

AXA/Equitable to Teachers: We Hide Fees From You 

On July 18, 2022, the Securities and Exchange Commission announced that Equitable Financial, one of the most prevalent providers of 403(b) plans to K-12 educators, would pay a $50 million fine for deceptive fee disclosure practices. More than 1 million policyholders were affected.

From the press release:

As described in the SEC’s order, since at least 2016, Equitable gave investors the false impression that their quarterly account statements listed all fees paid during the period. The SEC’s investigation found that, in reality, the statements listed only certain types of fees that investors infrequently incurred and that more often than not the statements had $0.00 listed for fees.

Zero Contrition by Equitable

As fiduciary advisor — and my partner in all things 403bwise — Scott Dauenahuer noted in an interview with ThinkAdvisor: Equitable’s CEO “couldn’t be bothered evidently for an apology. Instead Equitable won’t even admit they did anything wrong (per the settlement) and their spokesperson thinks the appropriate response is gaslighting. Equitable didn’t apologize, instead they committed to ‘learning from this.’”

Enough is Enough

Every educator in the country should demand that their school district drop Equitable immediately. If not, the school district must explain, preferably in writing, how they can justify permitting this firm to serve, err, misserve, its employees. Equitable is hardly the only K-12 403(b) offender, but dropping this company would be as Tom Hanks said in the 1993 movie Philadelphia to the question “What do you call a thousand lawyers chained together at the bottom of the ocean? A good start.” Note: There are plenty of lawyers we like!

Stay wise and well (and educate your colleagues about Equitable).

How to Exit Equitable

Our single most popular story is How to Get Out of Equitable. It explains step-by-step how individuals can exit this firm. This second resource How to Get Out of a Bad 403(b) explains the options for exiting any company. 
 

View all blog entries