Broker Check

The Wise Choice for Educators®

In this section…

The Wise Choice for Educators® 403(b) Plan makes available a low cost Tax Sheltered Annuity program, has no wrap fees and, provides access to an investment option with nearly 5,000 mutual funds that include Fidelity, Vanguard and American Funds while still maintaining the personal, individual service employees require. 

Why your district should consider joining NPPFA’s The Wise Choice for Educators® 403(b)/457(b) Plan

Plan benefits include:

  • Creates a “win-win” situation: the school business official gets an easy-to-implement program which lets them outsource their plan sponsor responsibilities, while putting employees’ interests first.
  • No wrap fees
  • No annuity charges of any type
  • No Contingent Deferred Sales Charges
  • Internet access to participant education materials and accounts
  • Acceptance of all fiduciary responsibility for all delegated responsibilities including fund manager selection
  • Costs of plan range from 0.65% – 1.55%.
  • Up-to-date plan documents (NPPFA monitors new regulations and when appropriate updates the plan documents to keep the plan compliant)
  • Quarterly review to ensure The Wise Choice for Educators® Plan is meeting the goals and objectives established by the NPPFA
  • Complete access to the broad mutual fund market for the sophisticated participant (Open architecture with Schwab and access to over 4,800 mutual funds)
  • Full fee disclosure. The fees are fully expressed in the investment ratio of each fund. Participants do not have to search in multiple locations for all of the fees they pay
  • A “Hold Harmless” to the plan sponsor for all delegated fiduciary responsibilities including investment manager selection
  • Streamlines the administrative process and decreases staff time spent on supplemental savings plans
  • Provides full compliance and remitting
  • Participant can still work with their representative

It’s your money.

While thinking about the fees you are charged in your 403(b) plan may not be at the top of your to-do list, there’s an important reason to pay attention.

403(b) plans are not free; in fact, you pay fees every day.

Over the course of time, higher fees can erode your supplemental retirement nest egg.1 For example, let’s assume:

  • You made annual contributions of $2000 a year ($166.67 per month) earning 8% a year compounded monthly
  • Over the course of 35 years, you would see your investment of $70,000 ($2000 x 35 years) grow to $382,321.

Now, let’s assume that fees, charges and expenses, estimated conservatively at 1% a year, were subtracted from your investment return:

  • In effect, you would be earning 7% a year, compounded monthly for the same time period, with all other assumptions being equal.
  • The result: over the course of 35 years, the impact on your return of an additional 1% in fees, charges and expenses would lower your return by $82,140.

For most of us, $82,140 represents a significant amount of money that is too big to overlook. To avoid the scenario above, it is important to know what you are being charged.

Ask yourself…

Why your school district constantly looks for the best value for all of their other benefit programs. Yet, when it comes to the district’s 403(b) plan, it does not undertake any fee or plan design comparisons.

Through its buying power, your district can negotiate lower fees, better plan designs and more diverse investment options – for the benefit of all concerned.

The Wise Choice for Educators® 403(b)/457(b) delivers low fees, eliminates surrender penalties and increases investment options – all without costing the district any additional tax payer money.

We understand your retirement needs: The Illinois Public Pension Fund Association is made up of public sector employees like you. That’s why we built the plan to be in your best interests instead of the interests of insurance companies or sales people.

There’s a good reason to pay attention to the fees you are paying in your 403(b)/457(b) plan.

Simply put:

  • You have a right to quality low-cost investment choices. After all, it’s your money that’s being invested.
  • You have a right to meet individually with a person who will provide suggestions on asset allocation.
  • It’s not necessary to have more than one vendor associated with the plan – and it is less expensive to have only one.
  • School business officials should use the Request for Proposal (RFP) to ensure that their employer-sponsored 403(b) plan is getting the best plan design at the lowest cost for their employees.

If your school official is not following these basic, prudent principles, you and your colleagues have the right to ask “Why not?”