A coalition of Florida education associations introduced a model plan for 403(b) plans in the state that it claims would give participants 33% more in retirement assets over a 30-year career than with existing plans. The group, Independent Benefits Council, recommended five companies as best in class providers: AIG Retirement, AXA Equitable Life Insurance, PlanMember Financial, American Century and Waddell & Reed, which all agreed to follow specific stipulations to keep fees low and meet IRS regulations. School boards can add one or more companies to the authorized list, but every effort would be made to require those companies to agree to the same stipulations as the five recommended companies.
The IBC, made up of the Florida Education Association, the Florida Association of School Administrators, the Florida School Boards Association and the Florida Association of District School Superintendents, worked with consultants Gallagher Benefit Services and TSA Consulting Group to develop the model plan and recommended the five providers. The council formulated the plan because IRS regulations taking effect on Jan. 1 require employers to take more responsibility for 403(b) plans. Also, the council wanted to find a way to reduce fees. The group recommends that all 67 Florida school districts adopt the plan.
Theres a lot of substance in this plan, IBC spokesman Tom Herndon, former executive director of the $187.5 billion Florida State Board of Administration, Tallahassee, said during a teleconference announcing the plan. It ought to be held out as a model for school districts across the country. FSBA spokesman Michael McCauley did not return a call seeking comment.