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By Greg Cieslewicz
Communications Specialist
WEA Trust
September 2006
Private retirement plans offered to public school employees across the country have come under heavy criticism recently for their high fees, low returns, and minimal oversight. Amid that criticism is a notable exception – the WEA Tax Sheltered Annuity Trust (WEA TSA Trust) program offered through WEA Trust Member Benefits.
Two prominent publications, Forbes magazine and the Los Angeles Times, praise the WEA TSA Trust for offering a soundly managed, low-fee program. They note the total cost to members of investing in mutual funds through the WEA TSA runs as low as 0.36% per year. That is about one-tenth the cost of the more expensive products on the market, Forbes writes.
“The WEA TSA Trust has shunned the standard model in which insurance salesmen are disguised as financial planners,” the Forbes article states. “The plan’s six certified planners offer teacher retirement planning purely for a salary to avoid dispensing conflicted advice.”
The credit for that unbiased advice belongs to the Wisconsin Education Association Council (WEAC). Its decision to create the not-for-profit WEA Tax Sheltered Annuity Trust in 1978 has benefited public school employees for decades. The WEA TSA Trust uses the group purchasing power of members to keep TSA fees low while gaining access to mutual funds that would otherwise be out of reach for most investors.
The six consultants, who have no personal profit motives, are registered securities representatives who answer questions and provide financial advice based on teachers’ retirement needs. The low fees the WEA TSA Trust charges are used to cover the cost of operations.
In many other plans, conflicting advice occurs because consultants make their salaries through sales commissions. Rather than looking out for the best interest of their clients, consultants are influenced by the desire to maximize their own income.
In Wisconsin, school districts will generally put investment providers on a list distributed to employees if there is sufficient demand within the district. Some districts list dozens of providers, which can create confusion, as teachers must sift through an array of products. In addition, since the school districts are not required to investigate the companies they list, there is usually no examination of the fees associated with the products.
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WEA TSA Trust could help you
The WEA TSA Trust program is available to employees at workplaces where WEAC represents some or all of the employees, and the employer has signed an agreement with the WEA TSA Trust. Participants do not have to carry the Trust health plan. Most employees, regardless of job classification, title, or location, are eligible to have part of their salary invested in the WEA TSA Trust as pre-tax or after-tax Roth savings.
Options available
The WEA TSA Trust offers an opportunity to put money in a guaranteed investment with a competitive interest rate (4.5% in 2006), invest it in selected mutual funds, or diversify with both types of investments.
More details
For more information on the WEA TSA Trust, go to the Web site weatrust.com/tsa or call
1-800-279-4030.
WEA Trust mixes education, '50s-style fun at Summer Academy
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The WEA Trust played a large role at the 2006 WEAC Summer Academy in Appleton from July 30 through August 2. Trust experts spoke on a variety of issues that affect public school employees, such as long-term care, how to work with the media, the history of the WEA Trust, and the current political landscape regarding health benefits for public school employees. The Trust also staged a 1950s rock ‘n’ roll reception where attendees enjoyed ’50s diner-style food, contests, and a special appearance by rock ‘n’ roll king Elvis Presley, shown at left.
Above right: WEAC President Stan Johnson, right, and WEA Trust President and CEO Fred Evert speak of the strong partnership between the two organizations.
Top: The Hula-Hoop contest was one of the many events enjoyed by about 350 guests at the reception.
Posted September 15, 2006