YOU HAVE FOUND OUR OLD WEB SITE. BE SURE TO CHECK OUT OUR NEW AND IMPROVED SITE!     Note: This story is a rebuttal to Opinion: NYSUT Has It Both Ways When It Comes to Retirement Plans by Joel L. Frank, Current Pension Topics Columnist, The Chief-Civil Service Leader.     The New York State United Teachers Benefit Trust Response   by Lynette Metz, Director of NYSUT Member Benefits     The opinion recently expressed in 403(b)wise about the 403(b) variable annuity, Opportunity Plus, which is endorsed by New York State United Teachers (NYSUT) Benefit Trust, ignores pervasive 403(b) industry concepts.   The NYSUT Benefit Trust is also being confused with NYSUT, the Union. The Benefit Trust would like to set the story straight.   Prior to 1989, the NYSUT Benefit Trust did not endorse any 403(b) program despite the fact that these programs were the tax-deferred savings vehicles made available to its members working in public educational institutions. However, the NYSUT Benefit Trust realized its members were disadvantaged by the existing 403(b) marketplace. Members' retirement savings were at risk due to poor financial ratings of the 403(b) providers. In addition, the products included high fees; inadequate one-on-one servicing; substandard loan provisions, if any; and limited proprietary investment options. The NYSUT Benefit Trust felt it was in the best interest of its members to explore a safe, financially sound 403(b) plan. It hired the services of The Segal Company, the nationally renowned benefits consulting firm, to conduct a thorough study of the 403(b) industry and to develop a Request for Proposal (RFP).   Numerous big-name companies responded to the RFP and made in-depth presentations to The Segal Company and to the Trustees of the NYSUT Benefit Trust. After an extensive study of the candidates and their proposals, and based upon the unbiased recommendations of The Segal Company, the Trustees endorsed ING (formerly Aetna), as the provider of 403(b) plans to NYSUT members. The NYSUT Benefit Trust worked with Aetna to create a product that addressed all the deficiencies in the 403(b) marketplace, and the Trust continues to work with ING to improve and enhance the Opportunity Plus 403(b) annuity.   Keep in mind, the NYSUT Benefit Trust is a separate trust entity from NYSUT, the Union. The Trust and the Union do not commingle funds. The Union does not receive a single cent from ING or any other benefit provider as a result of the Trust's endorsement of a product. A simple look at NYSUT's annually published audit report will disclose that NYSUT dues and interest income supply the resources necessary to operate the union. Any revenue generated from a Trust endorsement belongs to the Trust and can only be used, by law, to provide, improve, distribute and market the Trust's welfare and benefit programs to eligible participants.   Comments about the Union seeing 403(b)s as a means of raising revenue couldn't be more inaccurate, as are comments about just finding an investment provider willing to buy advertising space in NYSUT's newspaper, New York Teacher. Advertising revenue does not nearly cover the cost of publishing the paper. The Union does not rely upon newspaper advertising revenue for financial support of its union activities other than to recoup an extremely small portion of the operating expenses necessary to publish and distribute the paper. The annual cost of ING's ads in the New York Teacher is approximately $14,000, which is a minuscule fraction of the overall advertising revenues received by the New York Teacher and nowhere near the largest advertiser. Obviously, ING finds this to be a cost-effective means of reaching 500,000 current and prospective customers, just as do numerous other advertisers in the New York Teacher.   We've all heard the saying, "you can't compare apples to oranges." Yet, this is what is repeatedly done throughout the published opinion, which is critical of ING's 403(b) tax-deferred variable annuity, Opportunity Plus. The opinion makes comparisons between the cost of NYSUT's 401(k) plans for its employees and the cost of the Trust's 403(b) plans for its members. Tax-deferred annuity programs, by their nature, cost much more than employer-sponsored 401(k) plans. In the tax-deferred annuity marketplace, there is no employer sponsorship or exclusivity. ING competes with 50 other 403(b) providers in schools outside of New York City. In addition, a 401(k) plan offers limited, if any, access to one-on-one personalized education consultations. The Trustees of the NYSUT Benefit Trust believe the value members get from having face-to-face contact and experienced assistance with more than 100 Registered Representatives throughout New York State far outweighs the cost associated with this service. The NYSUT Benefit Trust has kept this cost to an absolute minimum, approximately one percent. In fact, the NYSUT Benefit Trust is aware of its competitors' costs and can wholeheartedly say that its costs are lower than those of most of the big-name full-service providers of 403(b) products in K-12 school districts.   Since its endorsement of ING's Opportunity Plus in 1989, the NYSUT Benefit Trust has worked diligently toward decreasing the program's expenses while adding enhancements. In a nutshell, here are some of the features and enhancements inherent in Opportunity Plus which the NYSUT Benefit Trust has achieved:     More than 100 dedicated Registered Representatives provide counseling, education and enrollment capacity regarding program features and tax-deferred savings.   Four non-commissioned, salary-compensated Certified Financial Planners provide support for unbiased education regarding all aspects of personal financial planning.   Contributions to 49 of the 50 investment fund options, are free of deferred sales charges found in most other full-service products. The Fixed Account, which is regulated by the NYS Insurance Department, does contain a deferred sales charge. However, the deferred sales charge in the Fixed Account is completely eliminated in cases of retirement, disability or after participation in the program for 10 or more years.   Elimination of annual maintenance fee.   An attractive Fixed Account rate currently crediting 4.25%.   One of the lowest fee 403(b) loan programs in the country (0% net charge effective January 1, 2004).   Free disability and life insurance rider (Lifestyle Security Protection¨) that provides an annual disability benefit of $500 to fund an annuity for disabled participants and a life insurance benefit payable to participants' beneficiaries in the event of death.   Free financial counseling (SurvivorSupport®) offered through AYCO to a beneficiary in the event of a participant's untimely death (valued at $5,500 per use).   One of the only 403(b) programs that has a dedicated Service Center with a toll-free phone line and Internet access built for NYSUT members and agency fee payers and housed within our state.   Many other product features not commonly found in employer-sponsored programs at an annual cost that is significantly lower than national 403(b) full-service product costs.     Actually, only six of the more than 50 investment funds in the Opportunity Plus program include 12b-1 fees, which are considered marketing fees. Six hardly equates to "nearly all" of the 50 investment choices, as the published opinion states.   One last point, the NYSUT Benefit Trust does receive expense reimbursement from ING. However, all fees received by the Trust are used to enhance the program that our members enjoy. These enhancements set our program apart from the competition. The fees are no secret. They are clearly stated in the prospectus materials that each participant receives. NYSUT members are free to choose any program they desire. Neither NYSUT, the Union, nor the NYSUT Benefit Trust restricts the marketplace through the Trust's Opportunity Plus endorsement. The Opportunity Plus is just one of many choices a member may make. Opportunity Plus excels because it offers service and features not available in the other providers' programs. Knowing that the NYSUT Benefit Trust stands behind Opportunity Plus 100 percent, NYSUT members choose to participate in that particular program. Voluntary choice of the endorsed program over the many other program options indicates proof of the program's quality.   Meanwhile, the Trustees and staff of the NYSUT Benefit Trust will continue to monitor Opportunity Plus and make improvements whenever possible. Our work in improving Trust-endorsed programs for members is never complete.   Home | Disclaimer | © 2003 403(b)wise. All rights reserved.