California School Districts Can Go Single Vendor 👍
February 8, 2022
Just do it. That’s it. It’s their plan. They are in control. It’s what the 10 campuses in the University of California system do. It’s what the 23 campuses in the California State University system do.
770.3 Only if You Want It
For decades we have been led to believe that K-14 employers in California and their massive 403(b) vendor lists are at the mercy of insurance code 770.3 which dates to the Nixon Administration. It’s what much of the financial services industry wants you to believe. As a result K-14 employees are subjected to bloated vendor lists filled with high-cost insurance products pitched by sales agents masquerading as financial advisors. Search vendor lists here.
Way back in 1982 the UC Regents successfully defended their right to control their 403(b) plan in McFee vs. Regents of the University of California. As a result their employees, like those at Apple Computer, invest through one record keeper (Fidelity Investments). It’s the same single vendor the California State University system offers.
Jeff Chang Explains All
Benefits attorney Jeff Chang Best Best & Krieger LLP details how the California college and university systems do it, and how K-14 employers could do it as well in a series of articles, and in a podcast with myself and my partner fiduciary planner Scott Dauenhauer, CFP.
- School District 403(b) Plans and Investment Selection (article)
- School District 403(b) Plans and Recordkeeper Selection (article)
- School District 403(b) Plans and Participation-Directed Investments (article)
- How California K-14 403(b) Plans Can Go Single Vendor (Teach & Retire Rich podcast)
So Many Benefits
Why should K-14 employers take control of their 403(b) plans?
- Hundreds of thousands of more dollars in retirement savings per participant
- Major recruitment tool
- Oversee one vendor instead of dozens
- Remit contributions to one vendor instead of dozens
- Are already a fiduciary for the 457(b) plan
- It's the right thing to do
There are no more excuses. It's time. Which employer has the foresight to go first?
Stay wise and well (and also: Ding-dong 770.3 is dead).
How California K-14 403(b) Plans Can go Single Vendor Benefits attorney Jeff Chang explains how California K-12 public schools and community colleges can do as the UC and Cal State (university and college) systems do: Go single 403(b) vendor. Listen Now »
Green Light for Single Vendor 403(b) Plans in California? Does article by benefits attorney offer path for California K-14 403(b) plans to go single vendor? Listen Now »