Please! Leave Your Political Views Out Of Retirement Plans

Our dysfunctional hyper-partisan culture has reached a new low. The New York Times has been accused of spreading “nonsense” for merely pointing out that many teachers (including some with children that have severe disabilities) are being cheated in their 403(b) plans.

This “liberal bias” includes a group of educators who are being charged as much as 10% per year by the Legend Group to manage their retirement portfolios.

According to an opinion piece in 401k Specialist: New York Times Nonsense: Donald Trump and Defined Contribution Plans; since teachers get really good benefits it is okay that they are being ripped off in their defined contribution plans.

Conveniently, the piece fails to mention that in at least 12 states, teachers are not covered by social security.

According to this logic, it would be fine if high salaried workers at a private corporation were getting swindled in their 401(k) plans because they would be receiving nice pensions anyway.

Maybe it is my head cold clouding my thinking, but aren’t these two items separate topics that should be considered on their own merits?

This new line of thinking could be used to look at the world in some interesting ways:

• It would be okay for state college students to be overcharged for their textbooks because their tuition is low.
• McDonald’s could justify a fee to use the bathroom because “Hey, you are only paying a dollar for lunch.”
• Planet Fitness could charge you $15 to use a towel because your $10 monthly membership fee is absurdly low.

Obviously, these arguments are ridiculous.

This editorial makes some other strange points, such as “union negotiating tactics often called for lower salaries in order to win better benefits.”

Interesting.  According to The Washington Post’s article, Think Teachers aren’t paid enough? It’s worse than you think, teachers have a wage penalty of 17% compared to other comparable public workers.

These workers have similar benefit packages so maybe teachers’ salaries are not negotiated lower. They are just low in comparison to others with comparable educational backgrounds.

It is also states that, “As for 403(b)s, Plan Sponsor Council of America reports higher contributions and better balances than similar DC plans.”

What is not mentioned is that teacher participation rates hover near 30% while 401(k) numbers are more than double this figure.

Part of the reason for this “participation gap” is the low-grade quality of choices in most non-ERISA 403(b) plans.

The piece cites that salaries for in teachers in Massachusetts  “…average over $100,000 per teaching position. Low? We guess it’s a matter of perspective.”

According to the NEA, the state with the top teacher salaries is New York, coming in at $69,118. Massachusetts is third with an average of $66,712.

Is it a stretch to say that an individual that has a master’s degree with several years of experience brings home a paycheck in this range?

The 401kSpecialist believes this statement belongs on the editorial page. “As a result, the people who do the most good in the world, spending their careers helping others in exchange for modest paychecks, often get the worst retirement plans.”

Teachers’ average salaries fall anywhere between $50,000-$70,000. They have retirement plans that contain products that legally would not be permitted under the new Department of Labor’s Fiduciary rule in a 401(k) plan. According to 401kSpecialist, this is just liberal propaganda.

Unfortunately, this is the inside dope. Teachers make moderate salaries, do a lot of good, and have rotten 403(b) plans.

These are facts and not opinions.

The real shame of all of this is hyper-partisan thought blinds people to injustice.

Any fair-minded person would agree that ripping people off in any type of retirement plan is wrong. That is the reality, plain and simple.

Defending the indefensible is an impossible task, no matter what your political opinions are.

People have no right to loot anyone’s retirement account.

Don’t take it from me, read the 401kSpecialist editorial and compare it to the fact checked story Think Your Retirement Plan Is Bad? Talk to a Teacher by Tara Siegel Bernard.

I will let you be the judge on who has the agenda.