Teachers Pay High Fees for Retirement Funds • Hacker News Board

Re: Teachers Pay High Fees for Retirement Funds

#71

Post by pnutjam » Wed, Dec 18, 2019, 6:21 PM UTC

lotsofpulp wrote: post #51

pnutjam wrote: post #50

Earlier quoted context omitted.

FSA is great if you plan to change employers, there is no clawback if you empty the account in January and change employers in February. I'm not sure why this was never considered, but it's one of the few places an employee can benefit.

There is absolutely no benefit of an FSA over an HSA, other than to pad the coffers of whoever gets the leftover FSA funds if the participant can't accurately forecast their spending. FSA's simply should not exist.

True, but they are either or and a High deductible plan is a disaster for many people.

Re: Teachers Pay High Fees for Retirement Funds

#72

Post by dvdhnt » Wed, Dec 18, 2019, 6:24 PM UTC

bryanlarsen wrote: post #35

Unions are the reason that teachers have retirement funds in the first place. That doesn't excuse them from the ridiculously high fees, but don't throw out the baby with the bathwater.

I can't believe how much union busting is going on in these comments. People take for granted the little wins labor has gotten over the last century.

Re: Teachers Pay High Fees for Retirement Funds

#73

Post by lotsofpulp » Wed, Dec 18, 2019, 6:24 PM UTC

grimjack00 wrote: post #60

lotsofpulp wrote: post #49

Earlier quoted context omitted.

>These accounts are no more a "give away" to the rich than the progressive income tax schedule is a "give away" to the poor. Since only the rich are employed by employers who offer the benefits of these accounts, it is effectively a give away to the rich. If it wasn't a give away restricted to a certain populace, then it would be de-linked from employment and available for everyone.

> Since only the rich are employed by employers who offer the benefits of these accounts So, being an employee of a company that offers a 401k is the new definition of "rich"?

I was referring to the concept of employers being able to contribution $56k to an employee's 401k (which only happens if employee is already highly compensated), as opposed to IRAs being capped at $6k.

Re: Teachers Pay High Fees for Retirement Funds

#74

Post by frockington1 » Wed, Dec 18, 2019, 6:27 PM UTC

toast0 wrote: post #62

frockington1 wrote: post #41

Earlier quoted context omitted.

My employer subsidizes my health insurance and contributes to my 401k and a pension. It's a nice perk and part of the reason why i work for them. It's a win-win

Employer based health insurance and what not makes it harder to compare job offers and increases your costs to switch employers. If instead, your employer simply paid you the money they would have paid to subsidize these things, and you paid for the services you wanted, you could actually keep your services in case you changed jobs or lost your job or took time off or whatever. It would be pretty hard to setup an ind…

Unfortunately the federal government subsidizes this behavior so I would need to spend more than what my employer does.

Re: Teachers Pay High Fees for Retirement Funds

#75

Post by dvdhnt » Wed, Dec 18, 2019, 6:27 PM UTC

seibelj wrote: post #10

aphextron wrote: post #6

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.

> I would rather be able to switch jobs easily than have to follow union rules

What do you think society is? We live in a giant union of citizens.

The point of the union is to protect labor from capital; and protect the rest of us from selfish attitudes.

Re: Teachers Pay High Fees for Retirement Funds

#76

Post by bluGill » Wed, Dec 18, 2019, 6:29 PM UTC

whb07 wrote: post #59

MrFoof wrote: post #18

Earlier quoted context omitted.

>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. "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 news…

Last I checked most of Europe is expecting interest rates in the NEGATIVE. In the US interest rates are being chained to the floor at 2%. So yes, 1% is beyond massive and the difference between 1% to 2% isn’t 1%.

1% fees not interest rates. They are different things. The 1% fee is they take 1% off the top every years. They might invest in good investments otherwise, but even the best investments cannot makeup for good investments and 0.15% fees where are common these days.

Re: Teachers Pay High Fees for Retirement Funds

#77

Post by lotsofpulp » Wed, Dec 18, 2019, 6:31 PM UTC

frockington1 wrote: post #57

Ididntdothis wrote: post #44

Earlier quoted context omitted.

They can subsidize as much as they want. But they receive tax benefits that are not available to people whose employer doesn’t do this. In addition they choose health insurance and 401k providers for you. I am pretty sure their incentives and yours aren’t aligned so you may actually get a bad deal. It simply makes no sense.

I'm not trying to be dense, I don't understand why this doesn't make sense. My employer offers salary, insurance, bonus, perks etc. and others do the same. I look at my options and take the offer I value the most. What part of the contract doesn't make sense? Most contracts have two parties with different incentives

The part where because company A employs 5,000 people, and can segregate their employees into a healthier than average pool (since they're working, they usually are), they get access to lower cost health insurance to pay their employees with, and company B, a new startup trying to compete, has to pay higher insurance premiums on healthcare.gov because they don't have the established group of lives to create a separate insurance pool, and because they can't afford the overhead of administrative work involved with providing health insurance benefits.

Re: Teachers Pay High Fees for Retirement Funds

#78

Post by dsfyu404ed » Wed, Dec 18, 2019, 6:32 PM UTC

lotsofpulp wrote: post #49

darawk wrote: post #47

Earlier quoted context omitted.

This is a very strange interpretation. Lost revenue relative to what? Not having it? Is the government losing revenue by not taxing the bottom 50% of income earners, too? The tax code is structured this way to incentivize saving for retirement. Social security exists for the same reason. The government allows you to defer taxation in these structured vehicles so that you are better able to care for yourself in your o…

>These accounts are no more a "give away" to the rich than the progressive income tax schedule is a "give away" to the poor. Since only the rich are employed by employers who offer the benefits of these accounts, it is effectively a give away to the rich. If it wasn't a give away restricted to a certain populace, then it would be de-linked from employment and available for everyone.

>Since only the rich are employed by employers who offer the benefits of these accounts

Everyone and their brother has a 401k today. Even many entry level blue collar jobs have 401k plans.

Re: Teachers Pay High Fees for Retirement Funds

#79

Post by Ididntdothis » Wed, Dec 18, 2019, 6:34 PM UTC

frockington1 wrote: post #57

Ididntdothis wrote: post #44

Earlier quoted context omitted.

They can subsidize as much as they want. But they receive tax benefits that are not available to people whose employer doesn’t do this. In addition they choose health insurance and 401k providers for you. I am pretty sure their incentives and yours aren’t aligned so you may actually get a bad deal. It simply makes no sense.

I'm not trying to be dense, I don't understand why this doesn't make sense. My employer offers salary, insurance, bonus, perks etc. and others do the same. I look at my options and take the offer I value the most. What part of the contract doesn't make sense? Most contracts have two parties with different incentives

It’s all good. But it doesn’t make sense that the employer can choose to get a tax benefit. Every employee/person should have this tax benefit available no matter what the employer does. Your employer still can subsidize this, no problem.

Re: Teachers Pay High Fees for Retirement Funds

#80

Post by lotsofpulp » Wed, Dec 18, 2019, 6:35 PM UTC

pnutjam wrote: post #71

lotsofpulp wrote: post #51

Earlier quoted context omitted.

There is absolutely no benefit of an FSA over an HSA, other than to pad the coffers of whoever gets the leftover FSA funds if the participant can't accurately forecast their spending. FSA's simply should not exist.

True, but they are either or and a High deductible plan is a disaster for many people.

Yes, I forgot about that. But generally, since the expected cost of one's healthcare remains the same regardless of what kind of insurance plan they choose, the difference in premiums for a high deductible and low deductible plan is just the present value of the expected additional costs the insurance company has to pay because of the low deductible.

In other words, you can pay more via a higher monthly premium now, and pay less when you pay for the healthcare. Or pay less for the premium now, and pay more when you pay for the healthcare. Otherwise, the insurance company wouldn't be in business for long.

The difference is who gets to keep the investment earnings from the savings kept until you need healthcare.