The Wall Street Journal Impeaches the NEA
January 7, 2020
For close to 20 years we have been vociferously criticizing the National Education Association's unholy alliance with Security Benefit, a firm that peddles unsuitable high cost-products to teachers. This is my podcast partner fiduciary advisor Scott Dauenahuer’s blog post from December 2001.
This is the front page of The Wall Street Journal on December 19, 2019 on the day after Trump’s impeachment. Above the fold is a story documenting that historical event. Below the fold is a story documenting the NEA’s 403(b) malfeasance written by the excellent reporters Anne Tergesen and Gretchen Morgenson (note Anne's signature). Above the fold is my reworking of the headlines.
Teacher Thought the NEA Had His Back
Like countless other teachers, Placerville California teacher David Hamblen thought the NEA had his best interests in mind.“If they were recommending it, it must be a very good product,” Mr. Hamblen said in the story.
The misnamed NEA Valuebuilder product he was sold is awful. It sports expenses of up to 2.99% a year with another 1.45% in optional “features.”
Millions for the NEA. High Fees for Teachers.
The NEA’s for-profit subsidiary NEA Member Benefits Corp. received $3.6 million from Security Benefit according to the story. Talk about a quid pro quo. As a comparison, fees average less than 1% in 401(k) plans according to BrightScope Inc.
A Quote That Sums it All Up
Leave it my podcast partner to nail the NEA’s shameful behavior. “The unions should be advocating on behalf of members, not selling products to them,” said Scott Dauenhauer, CFP® in the story. “They are there to protect teachers’ rights, not exploit them.”
Vanguard for NEA Employees. Garbage for Teachers.
It’s cruel irony that if you work for the NEA you have access to Vanguard. This proves that the NEA knows better. When it comes to teacher 403(b) plans, they just don’t give a damn.
Impact of 1% in Fees
Impact of 2.5% in Fees
Charts from The Wall Street Journal via Vanguard Group Inc.
We discuss The Wall Street Journal article: Teachers Pay High Fees for Retirement Funds. Unions Are Partly to Blame. Listen Now »