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Dweiss3 asks:

<<My wife works for the local school system and is contributing the max ($10,000/year) to her 403B retirement account. The account is set up to go into 4 Vanguard funds and is performing quite well. The school system's 403b plan is administered by Lincoln National. Lincoln national takes a 5% cut off of the top of each contribution (e.g. $500 per paycheck is withheld but only $475 is invested in the Vanguard funds). I don't understand what Lincoln National does to earn this fee. Is there any way to circumvent this fee and have the 403B contributions go directly from the school system to Vanguard? Is this a standard setup for 403b's? Any advice would be appreciated. >>

Yep, Franklin has got a royal rip-off going for itself. No, it's not really standard and yes your wife's school system is lax and doesn't have the best interests of its employees at heart. The only way you can get around this is if she sets up separate accounts with Vanguard (403b(7) accounts, which Vanguard will accept) and her school system will allow a direct deposit to those accounts without going through Franklin. The latter will be the hang-up because with governmental entities plan administration is almost always a political decision. Hence the high fees.

I don't foresee much success here. However, if she can get other teachers to join her in voicing dissatisfaction with the outrageous charges being levied, maybe the school administration and politicians will pay attention.


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