11–20 of 109 posts
Earlier quoted context omitted.
I don’t understand why 401k even exists. The money should go into an IRA controlled by the owner. The employer should have no say in this. The same should go for health insurance....
It exists to give large employers who can afford to pay for administering those benefits an advantage over smaller employers. Same for health insurance.
Unions are not perfect. But they are the only protection individual laborers have left against the unstoppable power of modern corporations. Don't ever fall for the endless slandering laid against them by capitalists.
Employees have the ability to switch jobs, whereas unions make it hard to join a different shop at the same seniority level as before. I would rather be able to switch jobs easily than have to follow union rules.
Skilled employees, sure. But the vast majority of unskilled labor is completely at the whims of their employer without the protections afforded by unions. People fought and died for the right to create these organizations in the past, and we should be reticent to give that up just because the system isn't perfect.
I don't see any reason an employer or union wouldn't offer Vanguard/Fidelity/Schwab for 401k/HSA with access to the I assume they're probably getting some kickback or something from the arrangement of restricting the 401k/HSA member's funds to high fee investments. Edit: At least for an HSA, one can transfer the funds out into a Fidelity HSA account immediately. With a 401k, you have to wait until you leave your empl…
One important difference is that teachers tend to use 403b vs 401k. One difference the WSJ calls out is that the rules around 403b aren't as strict, and the employer (ie: the school) isn't required to act in the best interest of the teacher when offering the plan.
Earlier quoted context omitted.
It exists to give large employers who can afford to pay for administering those benefits an advantage over smaller employers. Same for health insurance.
It's not so much an "advantage over smaller employers" as it is a "subsidy for large employers" or a "way to spend less money to offer the same benefits so profits are higher".
Unions are not perfect. But they are the only protection individual laborers have left against the unstoppable power of modern corporations. Don't ever fall for the endless slandering laid against them by capitalists.
Earlier quoted context omitted.
It exists to give large employers who can afford to pay for administering those benefits an advantage over smaller employers. Same for health insurance.
Maybe this made sense in 1978. But we are now in an era of zero fee trades, index funds, and microscopic management fees.
In fact, couples where one spouse who works for an employer with a 401k and one who doesn't are actually punished by lowering the contribution limit for IRA to zero. Someone explain to me why that was put into law.
https://www.investopedia.com/401-k-vs-ira-contribution-limit...
Unions are not perfect. But they are the only protection individual laborers have left against the unstoppable power of modern corporations. Don't ever fall for the endless slandering laid against them by capitalists.
Employees have the ability to switch jobs, whereas unions make it hard to join a different shop at the same seniority level as before. I would rather be able to switch jobs easily than have to follow union rules.
Also, as someone in tech, I constantly hear people talking about downleveling when they change jobs, I hear people talking about unclear promotion criteria, etc.
I don't see any reason an employer or union wouldn't offer Vanguard/Fidelity/Schwab for 401k/HSA with access to the I assume they're probably getting some kickback or something from the arrangement of restricting the 401k/HSA member's funds to high fee investments. Edit: At least for an HSA, one can transfer the funds out into a Fidelity HSA account immediately. With a 401k, you have to wait until you leave your empl…
"Liz Cannon, who heads the Indian River chapter of the Florida Education Association, urged union members to buy retirement investments from Valic Financial Advisors Inc. through a firm owned by the union. That way “we also make money,” she said in a November 2017 newsletter, through regular dividends."
It's stated clearly in the article that there functionally are.
Tip of the iceberg at that. I'm sure there's a few folks between the investment firm and related parties that have bought themselves a boat based on the massive haircut the teachers are taking.
The kick in the gut though is the WSJ article itself. To the naive reader, it makes it seem as if 1% fees are good. They're not. 1% is wildly un-competitive in today's environment.
I don't see any reason an employer or union wouldn't offer Vanguard/Fidelity/Schwab for 401k/HSA with access to the I assume they're probably getting some kickback or something from the arrangement of restricting the 401k/HSA member's funds to high fee investments. Edit: At least for an HSA, one can transfer the funds out into a Fidelity HSA account immediately. With a 401k, you have to wait until you leave your empl…
The big kickbacks come from the "benefits consulting" companies that "help" small to midsize businesses figure out what vehicles to use to offer benefits for their employees. (This sometimes includes health insurance but we're not talking about that) Their main source of income is commissions to their company for funneling their clients' employees money into the funds themselves. Unsurprisingly, the funds with higher fees pay higher commissions.
The kickbacks to the companies themselves take the form of offloading HR functions onto the "broker" aka benefits consultant. They will do things like print all the materials, give lunch and learns to the employees about the plans, fulfill all the regulatory functions, etc. They also tend to take the HR decision makers out to fancy lunches and things of that sort. So mostly the HR departments are being bribed to look the other way in order for their jobs being easier.
I've pointed out suboptimal fund offerings at multiple small companies and been ignored/rebuffed every time. Every large company I've worked for had really good fund offerings.
It's amazing how simple human laziness and willful ignorance leads to literally millions in wealth being siphoned off of hard working employees into the pockets of benefits consultants and mutual fund companies. The HR departments of many of these companies literally don't care.
The person that first came into my classroom to offer to help me set up a 403B ends up being one of the most expensive 403Bs options I have per the website https://www.403bcompare.com/
And then on top of it all my school district employer even charges me a monthly fee of $3 just to send money to my 403B.
Edit: It's actually the 403B admin that is charging me the $3 a month.