Why Are School Districts Still Offering Equitable 403(b) Products?
March 14, 2023
More than eight months after the SEC fined Equitable Financial Life Insurance Company $50 million for misleading account statements relating to fees charged, Equitable products are still widely available in K-12 403(b) plans.
High Cost
There are so many reasons this company should not be allowed to sell products to educators. It's highly doubtful a fiduciary would recommend their EQUI-VEST 201 product that is widely available in schools. Why? High costs. How expensive?
- S&P 500 fund (EQ/Equity 500 Index) costs 1.75%! (1.20% Mortality and Expense charge + 0.55% fund charge). See M&E fee here and fund charge here (search EQ/Equity 500 Index).
- Target date fund (Target 2045 Allocation) costs 2.1%! (1.20% Mortality and Expense charge + 1.10% fund charge). See M&E fee here and fund charge here (search Target 2045 Allocation).
Note that Vanguard offers target date funds for 0.09%
Hard to Exit
Not only is it expensive to get into Equitable. It can be expensive to get out (see: Surrender charges at bottom; Also note that dial at top showing Average Expense Ratio does not include 1.20% M&E fee).
The Number One Question in the 403bwise Facebook Group?
How to get out of Equitable.
How to Get Out of Equitable
Here’s how to exit Equitable.
Third Party Review of EQUI-VEST 201
Don't take our word for it. Read this.
Stay wise and well (and dump Equitable or make them compete through the RFP process)
