Last week, on Wednesday May 4th, the New York Post showed once again why it has earned top place in the gutter journalism sweepstakes of New York City with an editorial, Where’s Elliot? Riddled with factual errors and misrepresentations, the editorial targets a voluntary investment program for certain categories of NYSUT members with the investment firm, ING.
Despite the fact that this is not a program in which the UFT participates, the Post editorial cites Randi Weingarten and the UFT. And that is only the beginning of a number of gross distortions.
We reproduce below the statement on NYSUT President Dick Iannuzzi on the subject.
In a recent editorial, the New York Post called on the state attorney general to review the relationship between New York State United Teachers’ Member Benefits Trust and the investment firm ING, which offers a 403b investment plan called Opportunity Plus that is a voluntary investment program for NYSUT members.
One problem with the Post editorial: Since April 2005, the attorney general has been conducting a review of 403b industry practices, including ING’s relationship with NYSUT’s Member Benefits Trust. NYSUT has participated fully in the review and results are expected shortly. In fact, in anticipation of changes in the 403b industry, the Trust has proactively over the last 18 months strengthened its policies and procedures benefiting members.
Another problem with the Post editorial: The Post doesn’t understand the-403b industry. The plan endorsed by NYSUT’s Member Benefits Trust provides additional benefits and services — including investment counseling and life insurance — not available through other investment plans. The fees and benefits are disclosed in the plan’s prospectus to any potential investor. Most school districts offer more than a dozen 403b plans for employees to choose from, and participation in Opportunity Plus is voluntary. NYSUT’s Member Benefits Trust also offers a lower cost and self-directed plan, Opportunity Independence, for participants who want only minimal investment assistance.
Another problem: The Post neglected to mention that members of the United Federation of Teachers in New York City do not participate in the ING-sponsored 403b plan; it is not an option available to UFT members. Apparently, the Post was just looking to make yet another gratuitous attack on UFT President Randi Weingarten.
And yet another problem with the Post editorial: Contrary to the Post’s ranting, union officials do not “get compensated for endorsing.” The relationship with ING is exclusively with NYSUT’s Member Benefits Trust, a tax-exempt, not-for-profit Trust Fund established and maintained for the benefit of the participants and beneficiaries of Member Benefits. There is no intermingling of NYSUT and Member Benefits funds. Any fees NYSUT’s Member Benefits Trust receives are used to fund the nearly 40 programs and services offered by the Trust. No money from the Trust or vendors is used to fund daily union operations.
The Post editorial board could have written about this, but no one would ever expect the Post to let the truth get in the way of a cheap attack on unions. NYSUT and the Member Benefits Trust are committed to serving members and to setting the record straight on these programs and services.
16 Comments:
1 Chaz
· May 7, 2006 at 2:28 pm
The New York Post may be wrong on many things. However, NYSUT has much explaining to do why they do business with a company that screws NYSUT members with uncompetitive retirement & insurance products.
While its true that the UFT does not endose these NYSUT plans, we still are targeted by NYSUT with some of these plans. Therefore, by ignoring it, the UFT is guilty by not looking out for its members. Moreover, the UFT itself, is guilty of having a rigid, retirement plan that does not allow for more investment choices, limits switching from one option to another, and limiting the amount that one can move funds to different options(it takes a year to completely move the funds from one option to another). Check the retirement expert in the civi service paper The Chief who has time and again stated that the TRS plan is not a good retirement plan and when asked that the UFT comment, there is just silence.
Rather than defend the undefendable the UFT should be wisely spending our dues on superior investment choices for our dues-paying members.
2 SOC ST TEACHER
· May 7, 2006 at 5:10 pm
Chaz is so kneejerk in his attacks on Randi and the UFT that he doesn’t even stop long enough to read, before he launches into his tirade. He is so ready to jump, that he is only too happy to take the side of the Post when they are clearly misrepresenting what is going on.
Here the Post attacks Randi and the UFT for a NYSUT program that the UFT does not participate in, meaning that UFT members can not and do not use it, and he goes on as if UFT members could and do participate.
Whatever one may think about this particular benefit plan, and it is clear from the actual NYSUT statement that the accusations made are far from the mark, it has nothing to do with either the UFT or with us.
3 Chaz
· May 7, 2006 at 6:03 pm
SOC ST TEACHER;
Too bad you can’t read yourself. I did say that the UFT did not endorse these plans. However, we do get NYSUT life insurance applications as well as others investment instruments. Therefore, as long as the UFT allows NYSUT to send us these supplemental plans they can’t claim ignorance when one of NYSUT’s providers doesn’t do the right thing.
As for the accusations, while the Post got it wrong in stating that the UFT had any decision making on selecting the provider. THE STATE IS INVESTIGATING BECAUSE OF THE NYSUT DECISION TO OFFER ING’S UNCOMPETITIVE LIFE & RETIREMENT INSTRUMENTS TO IT’S MEMBERS! How are we to trust any NYSUT instrument? The UFT should immediately ban NYSUT from sending any supplemental benefit plans to it’s members until they have investigated the plan throughly. This is just common sense!
Next time read my comments more carefully before you make baseless accusations.
By the way I guess you just love our retirement plan…..Because people who understand retirement plans don’t!
4 jd2718
· May 7, 2006 at 6:30 pm
Chaz,
you are certainly right that problems with NYSUT are a concern for all of us. However, I cannot agree that an immediate ban is called for.
Further, I am to my core opposed to the privatization of pensions, in any form. This policy hurts the poorest and weakest among us.
I would love to know what is wrong with TRS (this is the first I heard anyone make that claim, and to be honest, I am skeptical), but to improve it if possible, that might be reasonable, not to dump it.
And yeah, SocStud Teacher, Chaz is quick to attack. Too quick. But you did miss what he said. NYSUT markets its products to UFT members, and Chaz would have us cut them off.
It would also be better for all to leave Randi out of this; we know she does not administer the pension.
Jonathan
5 Chaz
· May 7, 2006 at 7:05 pm
Jonathan:
Sorry; I should have been more specific. I was referring to the annuity retirement plan not the pension itself. For your information the TRS annuity plan is at a disadvantage to many other 403b plans.
. Limited investment choices (3)
. Limited changes in investment
options
. It takes a year to totally remove
your funds from an investment
option
. No up-to-date account balance.
. No employer match
Most if not all retirement experts will tell you that the TRS annuity retirement plan is an inferior retirement instrument.
6 jd2718
· May 7, 2006 at 7:36 pm
Thanks Chaz,
I was not familiar with the annuity. Do other major unions have better?
I ask, because the TDA is a supplement to our pension, not the entire pension. I was led to believe that the combination, if you’ll pardon the word, “rocks.” But I honeslty have no basis for comparison.
Jonathan
7 SOC ST TEACHER
· May 7, 2006 at 8:28 pm
Jonathan:
I buy some term life insurance through NYSUT; I can not and do not buy the ING investment services which is the source of the controversy. This is not a case of the UFT “not endorsing” ING; it is a case of the UFTers not participating in the ING plan, not being able to buy the controversial services, period. Even when you point this out to Chaz, in black and white, he is so intent upon attacking Randi and the UFT he goes right ahead anyway. You might as well talk to a stone wall. Or the New York Post.
If there is a complaint about services UFTers can and do buy from NYSUT, then it should be made — I see absolutely no particulars here.
Our pensions are neither something we can purchase from NYSUT, or even something that the UFT negotiates, one on one, with the DOE or the city. They are primarily governed by state law and the state constitution.
That being said, they are the envy of EVERYONE in the private sector. Bloomberg is out to get them, and is trying to use the resentment of those who have far less to get them.
As for the TDA program, I know teachers in my school who invested regularly in the TDA over the years who have close to $2 million in it. The options available are a sensible range of options that cover all of the bases of what a person might want for an investment, and I dare Chaz or anyone else to come up with another plan that has a guaranteed 8% return, or that has done so well on the variable.
The specifics that Chaz actually gets around to mentioning rely upon the ignorance of the reader to be convincing. For example, matching employer contributions are made to plans like our TDA when they are substituted for the pension itself. When they are supplement, as is our case, there is never an employer match. Note that in our pensions, there is no member contribution after 10 years in Tiers 3 and 4 and ever in Tiers 1 and 2.
8 Chaz
· May 8, 2006 at 7:48 pm
SOC ST TEACHER:
I don’t know if you are ignorant or just plain stupid! If you really believe our Annuity retirement service plan (403b) is so great then why does the retirement expert of the Civil Service newspaper THE CHEIF strongly recommend that teachers take their money out and put it in other 403b’s or 401K plan because of it’s rigidity and the lack of options? As I stated to Jonathan the TRS annuity retirement plan has many major problems.
1. Lack of investment options (3).
The majority of similar 403b
plans have between five and ten.
2. The limited time allowed to
switch from one option to another.
Most 403b plans have unlimited
option switching privileges.
3. The twelve months it takes to move
your money from one option to
another. Almost all other 403b
plans allow immediate transfer of
funds from one option to another.
4. The lack of an up-to-date balance.
This is very uncommon for a 403b
plan.
5. The only point you are half-right
on is that some 403b & 401k plans
do not give a company match.
However, many do. Especially if
they are big employers (IBM, GE,
etc.) The ones who don’t give a
company match are usually small
business that can’t afford it.
Finally, please smarten up and stop mixing apples (our pension plan which is quite good and an envy to others) with rotten apples (our inadequate 403b plan which nobody with any understanding would be envious of).
By the way, the return is 8.25% of the fixed investment option, good until June 2006 and can never go below 7% by State law. However, the historical stock market return is 9.15% for the same period. I’m glad that you know
teachers who are millionares. Just think how much more they would be worth if they had a better investment option selection?
Jonathan:
This is exactly the problem with the Unity faction of the UFT. The moment you criticize them for inaction, or ignoring real issues they attack you with the “get Randi” statement. It would be refreshing for the Unity educrats and their “see no evil followers” to enlighten us with real answers about real issues that affect our schools and classrooms.
9 SOC ST TEACHER
· May 9, 2006 at 2:35 pm
What I do know is that you seem to be incapable of discussing any issue without name calling and insulting people who disagree with you.
It is disingenuous to compare isolated features of annuity plans, rather than total retirement packages. GE and IBM provide company matches for employee contributions to their annuity plans, because in both cases, there is no guaranteed benefit pension plan — they did away with them. Their equivalent of our TDA is not a supplement, like ours is; it is the whole thing. No one in their right mind would substitute their annuity plan for the combination of guaranteed pension and annuity that we have, simply because they match the employee contribution to the annuity: our pensions are either total employer contribution [Tiers 1 and 2] or total employer contribution after 10 years of services [Tiers 3 and 4]. Who would trade that in for an employer match, in a program with no guaranteed benefits?
And, of course, over the long run, the stock market has outperformed the fixed investment. That is why the member has a choice — if it is the short run, and you are right before retirement, you may want to shift to a fixed rate return, to secure your investment; if it is the long run, you can afford to take the ebbs and flows of the markets. But show me some other annuity that offers such a high fixed rate investment.
Perhaps I should just be happy that at least you have stopped claiming that UFTers buy the ING services, and call it a day.
10 Chaz
· May 9, 2006 at 5:22 pm
SOC ST TEACHER:
I’m not calling you names. I’m just telling the truth. Your lack of understanding of our TDA while trying to defend it is the very essence of stupidity. It’s one thing not to understand your TDA (unfortunatly, many teachers don’t)but its another to defend it without knowing what you are defending!
Further, General Electric DID NOT DO AWAY WITH THEIR DEFINED BENEFIT PLAN as you incorrectly claim. They also give a 3% match on their 401(k) plan.
IBM has done away with their defined benefit plan as of this year but retained it for current employees. IBM also gives a company match on their 401(k) plan. In fact 20% of large employers have both a defined benefit plan and an annuity retirement plan.
Again, you keep confusing the pension with the annuity. Why? They are two completely different features and having a 401(k)/403(b) plan does not mean you can’t have a defined benefit pension plan that you keep claiming. I believe you really need to educate yourself on our plans before you comment on them.
Finally, as a social studies teacher, assuming you have been in the classroom recently, it is very important to read comments carefully. I never blamed the UFT for the NYSUT mess. I just said we must be careful about supplemental polices offered to the UFT membership from NYSUT. A wise precaution for any concerned union that represents the well-being of its members.
11 jd2718
· May 9, 2006 at 9:30 pm
I wish the two of you would continue – but without the insults. The content part of the discussion is valuable.
12 redhog
· May 10, 2006 at 4:56 am
There must be some good reason that 100% of a wide range of competent people without a person interest or profit motive insist with intensity that our TDA is not only unsurpassable, but unrivalled as a supreme tool for investment and return. I’m not an economist, but I can see,and almost hear, taste, touch, and smell the success of the TDA program.
13 jd2718
· May 10, 2006 at 1:14 pm
Redhog,
I don’t know that it is 100%. I know that what I have heard overall is positive. I am curious about what Chaz has to say.
Let’s keep apples to apples comparisons: For systems with the combination with pension and TDA, does our TDA fall short in some regards?
1) which union is GE’s Pension + TDA for?
2) 20% of large companies have pensions + TDAs? Source for this data?
3) Everyone else is correct: the retirement package must be examined as a whole. It is the combination of pension + TDA that we will be looking at.
4) The other defects you mention in our TDA, how major are they? Do unions with similar pensions have better TDA’s?
I’m unwilling to believe, without further evidence, that either side owns 100% of the accuracy in this debate.
14 Chaz
· May 10, 2006 at 8:07 pm
Jonathan:
Good questions.
First, all employees at General Electric have a defined benefit plan that allows for retirement at 60 years old. Plus GE also has a 401(K) plan with eight investment options that the company matches the first 3% of funds invested.
Second, I believe it was in the U.S. News & World Report last month where I remember reading it. Granted this number is going down (IBM for example). However, to assume that large employers either have a defined benefit plan or a 401(k)/403(b) plan is incorrect. Many of them have both.
Third, I do not have the answer to how our total retirement package compares to other unions. However, I do know that it is not as good as many NYS teacher retirement packages that uses TIAA-CREF (annuity) that gives over ten investment options, immediate transfer of funds from one investment to another, and an up-to-date balance.
Redhog:
Really? after I compared our wonderful TDA with other, more flexible and superior annuity retirement programs? By the way Redhog did you see what the retirement expert said about the competent people at the TRS in this week’s Civil Service Newspaper The Chief? I guess not.
When it comes to understanding how our TDA works, I’m starting to wonder if the term the “brightest” is an accurate statement for some of the New York City Teachers.
15 cocojambo
· May 13, 2006 at 10:07 pm
it says here http://www.moneysavingfreetips.com/403b-retirement-plans.html
that 403b retirement plans can make you good income during retirement… “Also when government officials, doctors, nurses etc retire, they will receive pension wages. But is this pension enough to fully cover your living costs? Probably not. The additional income provided by a 403 retirement plan will fill that gap for you, and make you enough and adequate income!”
anyone invested in these plans? do they really help during retirement?
16 SOC ST TEACHER
· May 15, 2006 at 9:45 pm
Chaz wants us to believe that GE has a great retirement plan, after decades under the whip of Jack Welch. All you have to do is google GE and pension, and read report after report of complaints from GE retirees and active workers, to realize that this claim is about as accurate as most everything Chaz says, which is to say, not at all.
And note how grudgingly he admits that IBM has eliminated defined benefit pensions, so that all of the talk about matching the annuity is for a plan that substitutes for a real pension.
Finally, note that in the TRS pensions, there is no requirement of matching funds because they are far better: for Tiers 1 and 2, never a cent from the member, for Tiers 3 and 4, a minor contribution for the first 10 years, followed by no contribution.