403bwise is a 501(c)(3) nonprofit organization.

The K-12 403(b) is broken.
Together we can fix it.
Dan's Blog

Florida District Prioritizes Furniture Over Teacher Retirement Plans 🛋️

September 7, 2021

Warning: This is not an Onion story…

There are bizarre financial sales tactics. Then there are K-12 403(b) sales tactics. We’ve written about how the teachers lounge is a dangerous place for teacher retirement plans. It’s where sales agents foist high-cost 403(b) products on unsuspecting teachers: 

Somehow, these lounges have become even more dangerous... 

Horace Make Over?

High-cost 403(b) vendors Horace Mann and AXA/Equitable are now paying for teacher staff lounge makeovers in the School District of Palm Beach, Florida. From an employee in the district: “Just wanted to pass this along as you may find interesting. Equitable (and Horace Mann) has found a new way to get into our staff lounges...pay for them to be remodeled. This is just a small sampling, I'm sure there are many more {sigh}.”

Who’s Really Paying? Teachers

Horace Mann charges 1.4% for a simple target date fund in its Retirement “Protector” product (1.25% Mortality and Expense fee plus 0.15% for fund) while imposing a 5-year surrender charge period on a rolling basis (meaning each new contribution triggers a new 5-year penalty window). 

AXA/Equitable charges 2.3% for a simple target date fund in its EQUI-VEST Series 201 product (1.2% Mortality and Expense fee plus 1.10% for fund) while imposing a 6-year surrender charge period on a rolling basis (meaning each new contribution triggers a new 6-year penalty window). As this fee impact chart shows, when you charge these kind of fees, a few thousand dollars on some paint, carpet and furniture to spruce up a teacher lounge is nothing. 

Amendment 8 of our 403(b) Bill of Rights seeks to ban sales agents from school districts “End Agent Trawling at Schools: Sales agents must be banned from K-12 campuses. Good luck doing that after they’ve renovated your staff lounge.

Stay wise and well (and don't let sales agents on your campus).