SEC Probing in 403(b) Plans for Teachers

SEC Probing in 403(b) Plans for Teachers

| October 31, 2019

This week, two different articles came out regarding the SEC starting two different investigations into teachers 403(b) retirement plans.

The first article is titled,  SEC probing compensation, sales practices in 403(b) plans for school districts.  This article highlights the SEC investigation into third party administrators who also sell 403(b) plans to teachers.  "The staff of the United States Securities and Exchange Commission is conducting an investigation ... to determine if violations of the federal securities laws have occurred."  The article also states that; Defined-contribution plans available to teachers, especially those teaching kindergarten through 12th grade, "have for a long time been like the Wild West," said attorney Marcia Wagner, "It wouldn't surprise me that the government is trying to crack down a little bit on the excesses I've seen in the industry,"  Click here to read the full article.

The second article is titled, SEC probes AIG unit that sells retirement plans to teachers.  This article singles out one of the larger 403(b) annuity companies, VALIC.  The inquiry centers on whether incentives in Valic's compensation structure rewarded representatives for selling higher-cost products to retirement plan participants and whether Valic properly discloses the payments its representatives receive on certain product sales, the report said.  Click here to read the full article.

Both of these articles re-affirm the message we have been trying to communicate on our website,  Over 75% of K-12 teachers are in a high cost plan!  Visit our website to see other articles, information pieces and find out how to schedule a second opinion.