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|Subject: Ex-workers ditch low-fee plan....||Date: 8/17/2014 7:49 AM|
|Author: BigBunkler||Number: 75513 of 77550|
As brokers urge IRA rollovers, ex-workers ditch their low-fee federal retirement plan.....
John Turner suspected that brokers were encouraging federal workers to ditch their top-flight retirement plan. So he went undercover. The former Labor Department economist called representatives at companies such as Bank of America, Charles Schwab and Wells Fargo. He identified himself as a potential client grappling with what to do with his own nest egg.
Turner thought he knew the answer: Leave it alone. As a legacy of his government service, he kept his money in the Thrift Savings Plan, considered the gold standard of 401(k)-type programs for its rock-bottom fees. Yet all but one company told him to roll over all his money into individual retirement accounts. On average, stock funds charge almost 50 times what the government plan does.
“It’s a scandal,” said Turner, director of the Pension Policy Center in Washington. “They are trying to sell me an IRA clearly not in my interest. It’s in their interest. They want to get the fees.”
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