Florida’s Best 403b/457b Vendors

Part of our reform effort is to convince OCPS to only offer low cost 403b and 457b vendors. Our first step was to analyze the vendors offered in every county throughout Florida. Our analysis looked at the cost to implement a fully diversified portfolio using either a Three Fund Portfolio or a One Fund Portfolio (both discussed in Investing 101).

We now realize that sharing information on the top 5 vendors might be helpful to educators outside of OCPS who’ve found their way to our OCPS-centric website. We’ve worked extremely hard to be accurate and complete but financial institutions can make miscommunication exceptionally easy. So if you find an inaccuracy or omission then please contact us.

Our Preferred Vendors
If we had access to all of these vendors then we’d make the following choices depending on whether we wanted a Three Fund Portfolio or a One Fund Portfolio:

Three Fund Portfolio
403b: Fidelity or Security Benefit’s NEA DirectInvest
457b: Fidelity (Security Benefit’s NEA DirectInvest isn’t available for a 457b)

One Fund Portfolio
403b: Vanguard
457b: Vanguard

Security Benefit’s NEA DirectInvest

Three Fund Portfolio
Total cost is about 0.07% plus $35/year (waived if balance exceeds $50,000), which consumes 3.08% of real profits over 30 years (assuming 6% returns and 3% inflation).

  • Vanguard Total Stock Market (VTSAX)
    • 0.05% fee per year (expense ratio)
  • Vanguard Total International Stock Market (VTIAX)
    • 0.12% fee per year (expense ratio)
  • Vanguard Intermediate Term Bond (VBILX)
    • 0.09% fee per year (expense ratio)

One Fund Portfolio
Their only offerings charge fees too high to warrant further analysis.

Sources

  • Plan information can be found here.
  • Fund information can be found here.

Fidelity

Three Fund Portfolio
Total cost is about 0.06% plus $24/year, which consumes 2.64% of real profits over 30 years (assuming 6% returns and 3% inflation).

  • Fidelity Total Market Index Fund (FSTVX)
    • 0.045% fee per year (expense ratio)
  • Fidelity International Index Fund (FSIVX)
    • 0.08% fee per year (expense ratio)
  • Fidelity U.S. Bond Index Fund (FSITX)
    • 0.05% fee per year (expense ratio)

One Fund Portfolio
Total cost is 0.13% – 0.78% plus $24/year, which consumes 5.68% – 31.97% of real profits over 30 years (assuming 6% returns, 3% inflation). We would only consider the fund charging 0.13% per year, the rest are too expensive.

  • Fidelity Four-in-One Index Fund (FFNOX)
    • 0.13% fee per year (expense ratio)
    • 85% stocks and 15% bonds.
  • Fidelity Freedom Target Date Funds (FFFVX, FDKVX, etc)
    • 0.56% – 0.78% fee per year (expense ratio)
  • Fidelity Asset Manager Funds (FASIX, FAMRX, etc)
    • 0.53% – 0.76% fee per year (expense ratio)

Sources

  • Fund information can be found here.
  • We couldn’t find specific plan information but Google searches reveal customers claiming a $24/year fee.

Vanguard

Three Fund Portfolio
Total cost is about 0.16% plus $45/year for owning 3 funds, which consumes 6.97% of real profits over 30 years (assuming 6% returns, 3% inflation).

  • Vanguard Total Stock Market (VTSMX)
    • 0.15% fee per year (expense ratio)
  • Vanguard Total International Stock Market (VGTSX)
    • 0.18% fee per year (expense ratio)
  • Vanguard Total Bond Market (VBMFX)
    • 0.15% fee per year (expense ratio)

One Fund Portfolio
Total cost is 0.12% – 0.16% plus $15/year for owning one fund, which consumes 5.25% – 6.97% of real profits over 30 years (assuming 6% returns, 3% inflation).

  • Vanguard Target Retirement Funds (VTTSX, VTXVX, etc)
    • 0.14% – 0.16% fee per year (expense ratio)
  • Vanguard LifeStrategy Funds (VASIX, VASGX, etc)
    • 0.12% – 0.15% fee per year (expense ratio)

Sources

  • Plan information can be found here.
  • We couldn’t find specific fund information but Google searches reveal customers claiming they don’t have access to the lower cost “admiral” shares.

ASPire

Three Fund Portfolio
Total cost is about 0.21% plus $40/year, which consumes 9.10% of real profits over 30 years (assuming 6% returns and 3% inflation).

  • Vanguard Total Stock Market (VTSAX)
    • 0.04% fee per year (expense ratio)
  • Vanguard Total International Stock Market (VTIAX)
    • 0.11% fee per year (expense ratio)
  • Vanguard Total Bond Market (VBTLX)
    • 0.05% fee per year (expense ratio)

One Fund Portfolio
Total cost is 0.27% – 0.31% plus $40/year, which consumes 11.64% – 13.31% of real profits over 30 years (assuming 6% returns, 3% inflation).

  • Vanguard Target Retirement Funds (VTTSX, VTXVX, etc)
    • 0.14% – 0.16% fee per year (expense ratio)
  • Vanguard LifeStrategy Funds (VASIX, VASGX, etc)
    • 0.12% – 0.15% fee per year (expense ratio)

Sources

  • Plan information can be found here.
  • Fund information can be found here.

PlanMember Direct

Three Fund Portfolio
Total cost is about 0.41%, which consumes 17.43% of real profits over 30 years (assuming 6% returns and 3% inflation).

  • Vanguard Total Stock Market (VTSAX)
    • 0.05% fee per year (expense ratio)
  • Vanguard Total International Stock Market (VTSNX)
    • 0.10% fee per year (expense ratio)
  • Vanguard Total Bond Market (VBTIX)
    • 0.05% fee per year (expense ratio)

One Fund Portfolio
Their only offerings charge fees too high to warrant further analysis.

Sources

  • Plan information can be found here.
  • Fund information can be found here.
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