What the bill will do: Bill A1974 will make it harder for teachers and school employees to save for retirement. How? It would prevent large school districts from putting their 403(b) plans out to bid to ensure the best pricing. It would require these districts to have at least 3 vendors without regard to the quality or cost of those vendors. In order to get the best pricing, school districts must be free to do what 401(k) providers are allowed to do: select a single vendor through a vigorous Request for Proposal Process.

Multi-vendor plans lead to higher investment costs: The non-profit 403bwise.org — which is dedicated to helping teachers and school employees get access to better, lower cost 403(b) investments — rates school district 403(b) plans. To date they have graded 3,341 plans. Less than 2% of plans rated have received an A grade. The reason? The overwhelming majority of plans are non-bid, multi-vendor plans offering largely high-cost investments. Learn more about the 403bwise.org district plan rating project by clicking here.

Multi-vendor plans are confusing: One vendor can offer dozens and dozens and in some cases hundreds of investment choices. So not only do educators have to compare multiple financial companies, they also have to sift through hundreds of investment choices. Investing is confusing enough. 

Multi-vendor is not best practice: If it was 401(k) providers would be multi-vendor. It isn’t and they aren’t. 

Single vendor movement: School districts are beginning to get wise to the benefit of single vendor 403(b) plans. Chicago Public Schools recently went to a single vendor. Numerous districts in Denver, Colorado have gone single vendor. Dozens and dozens of school districts in Wisconsin have gone single vendor. The reason? To lower investment costs, eliminate investing confusion, and provide educators with one great 403(b) option.  

Don’t knee-cap New Jersey school districts: Why do legislators want to take a cost-reduction tool out of the hands of school districts? 

Hard questions must be asked: Who is behind this bill? Who does it benefit? Certainly not teachers. 

A better idea: A bill requiring school districts to put their plans out to bid to ensure the best pricing.   

Take Action:  Let the sponsoring legislatures Raj Mukherji https://www.assemblydems.com/raj-mukherji/ and Roy Freiman https://www.assemblydems.com/roy-freiman/ know this bill is bad for New Jersey teachers. Tell them there is a better way: a bill requiring large school districts to put their 403(b) plans out to bid.