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Dan's Blog

How the TPA Grinch Stole the 403(b)

December 17, 2019

Every 403(b) investor liked low-cost mutual funds a lot.
But the Grinch who served as the Third Party Administrator, did NOT!

The Grinch hated low-cost mutual funds! To him they amounted to treason!
You want to know why? I will tell you the reason.

It's not that his shoes are too tight.
And it's not that his head isn't screwed on just right. 

And it's not that is brain is two sizes too small.

It's just that staring down from his administer cave.
His focus is not on helping teachers save.

It's on maximizing profits through "preferred provider" deals.
Which are vendor lists with little investor appeal.

Sadly, it is 403(b) investors who are feeling the pain.

Most of whom are stuck with an awful annuity,
And as a fiduciary advisor will tell you, these are pretty pooey.

Even most variable annuities really aren't great.
They are chock full of fees and wrapped up in an insurance crate.

Of concern to the Grinch, however, was the growing reform movement.
403(b) investors were finally demanding improvement.

This turn of events was nothing short of stunning.
Said the Grinch with a snicker: "I must find some way to stop low-cost mutual funds from coming."

Then he got an idea!

An awful idea!

THE GRINCH GOT A WONDERFUL, AWFUL IDEA!

He would blame IRS regulations for lack of low-cost choices.
Surely that would stifle the reform voices.

"Pooh-Pooh to 403(b) investors," he was grinch-ish-ly humming.
"They are finding out now that low-cost mutual funds aren't coming."

"They are just waking up! I know just what they will do!"
"Their mouths will hang open for a minute or two, then the 403(b) investors will all cry BOO-HOO!"

"That's a noise," grinned the Grinch, "That I simply must hear!"
So he paused. And the Grinch put his hand to his ear...

But wouldn't you know it? He wasn't right.
Many 403(b) investors went to the web, and found a Wise site.

They also joined a Facebook Group and learned from one another.
And things started to happen, and did they, oh, brother.

Articles were written in more than one magazine,
exposing the status quo as just obscene.

Every Wise 403(b) investor, the tall and the small,
were demanding change to benefit all.

The Grinch hadn't stopped change from coming.
He had to face facts it was up and running.

Folks are now realizing that low-cost investments make sense.
We are happy to report that 403(b) mutual fund investment is up by a healthy percent.

Is everything now perfect? Of course it is not.
There is more to be done; yes quite a lot.

To the Grinches out there who haven't Wised up yet: changes are coming on that you can bet.