Exit Light, Enter Night — We’re Off to 403(b) Land


“Sleep with one eye open gripping your pillow tight.”– Metallica

Ruthless predators in disguise are raiding the retirement accounts of public school teachers. Just like wildlife lurking in the rain forest on the banks of the Amazon River, they manipulate their environment to consume unsuspecting prey.

In the words of some other famous head-bangers, welcome to the jungle.

In 1913, Teddy Roosevelt decided to explore the dangerous tributary to the mighty Amazon River, The River of Doubt. This would have been an enormously difficult task for a young man. Roosevelt was 55 years old.

While his band of brothers thought they would be able to find food by hunting the jungle’s inhabitants; it turns out they were often the prey. The jungle was filled with nightmarish creatures that were masters of disguise. They would only show themselves when they wanted you to see them, so you could become their next meal.

In the words of Candice Millard, “The rain forest was filled with creatures that had evolved to exploit every weakness or vulnerability that the men might suffer.”

This menagerie includes the following:

  • Swarms of mosquitoes, flies, and wasps that inflict torment that would be fitting for Dante’s lower levels of hell.
  • Ants who hollow out the dead bodies of their victims and use the carcasses as Trojan horses, in order to stage their next attack.
  • Poison dart frogs that carry enough venom to kill 100 humans but display bold colors when needed to warn their predators to back off.
  • Giant six-inch beetles with legs so powerful it takes two men to break their hold on a human arm.
  • Schools of piranhas that can devour oxen in a matter of minutes.
  • Snakes with venom so lethal, one bite causes almost instant death.
  • A vampire-like one-inch catfish that can penetrate any bodily opening and stay there, feeding indefinitely.

Speaking of poisonous pit vipers, this brings us to the unregulated jungle of public school teachers’ 403(b) plans.

In our own travels, down the dark waters of teachers’ retirement plans, we have noticed a very disturbing trend. Large insurers and brokers have been using environmental camouflage to sell teachers overpriced and unnecessary annuity products.

In several schools we have seen, or been alerted to, the following unethical deceptions:

  • Insurance companies hiring the district’s former students to dupe teachers into purchasing financial products of mass destruction (like equity-indexed annuities and Class A, 5.75% front-loaded mutual funds).
  • School administrators or union heads arranging for their kin to work in school districts as financial advisors, without relinquishing their own supervisory role over potential teacher clients. Many teachers, fearing retribution, feel pressured to work with these salespeople.  In itself, this would be an enormous conflict of interest. It becomes almost criminal when these offspring work for high-cost annuity companies and push out advisors who had been looking out for the teachers’ best interests.
  • Entire companies that base their strategy on hiring former teachers to deceive their ex-colleagues into buying outrageously priced investment products.
  • Financial salespeople manipulating teachers into switching their low-cost, non-403(b) accounts over to them.  We have heard from teachers who had established low-fee 529 plans for their children, only to be tricked into transferring these funds into expensive, lackluster, broker-sold products.

Brokers often use cunning to disguise the explosive fee increases that would rival the talent of any Amazon predator.

In the animal kingdom, covert predators are hunting prey to maintain the survival of their species. They have adopted these traits under the laws of evolution and the brutal, but fair, rules of nature.

Financial salespeople in camouflage are acting under entirely different circumstances. Their actions are motivated by unadulterated greed and a perverse culture concocted by the executives of their firms.

Worse yet, they manipulate young people by creating an illusion that they are embarking on careers as “financial planners.” In reality, they are often nothing more than the financial version of a used-car salesman.

At the bottom of the barrel are school administrators and union officials who sell-out their colleagues to advance the careers of their own relatives. It should be forbidden for school or union leaders to allow their relatives, working for non-fiduciary firms, into a district where they are currently/formerly employed in a supervisory or leadership position.

In closing, a quote from Candace Millard’s engrossing book, The River of Doubt, sums up this disturbing situation up perfectly. Describing Roosevelt’s exploration party and their relationship to the environment she states:

“Compared with the creatures of the Amazon, including the Indians whose territory they were invading, they were all from the lowliest camarada to the former president of the United Sates — clumsy, conspicuous prey.”

Teachers are prey to slick-talking annuity salespeople. In some cases, teachers need to watch out for cannibalism by their supervisors, union, and ex-colleagues as they navigate the many dangers that routinely appear in the darkness of the unregulated annuity jungle.

Let us know if you are fed up and need some help in dealing with the piranhas roaming the halls of your school.

Source: The River Of Doubt: Theodore Roosevelt’s Darkest Journey by Candace Millard