Letter to Chairman Miller addressing fees in 403(b) retirement savings products in the K-12 marketplace
June 07, 2007
Dear Chairman Miller:
On behalf of the National Education Association's (NEA) 3.2 million members, we would like to offer a proposal for your consideration on an issue in which you have expressed an interest—addressing fees in 403(b) retirement savings products in the K-12 market place.
The attached report provides information in the following areas:
- The background: responding to the obstacles encountered working in a decentralized K-12 market place unlike the centralized 401(k) market place.
- Pricing variables: exploring different pricing models in the K-12 market place based on whether potential participants in 403(b) plans choose individual guidance or choose to develop their own investment portfolios.
- Program oversight: school districts that sponsor 403(b) plans generally do not provide oversight, leaving this responsibility to the product suppliers who meet with education employees to educate them about the importance of tax-deferred saving for retirement.
- Recommendations: offering a variety of 403(b) products that are suitable for individual needs would provide an incentive for public employees to take advantage of tax-deferred saving for retirement.
We hope you will find this information useful as you look further into these important issues.
Diane Shust, Director of Government Relations
Randall Moody, Manager of Federal Advocacy