There are two basic tax-sheltering vehicles offered to BTU members, the Mass Smart Plan and plans that fall under the 403b or Tax Sheltered Annuity umbrella. 403b plans are typically sold by commisioned-based salespeople, who are no longer allowed by BPS to walk through our buildings because of an agreement we reached a few years ago.
The BTU endorses no particular plan or vendor. The SMART Plan is screened and supervised, however, by the Mass State Treasurer, and is also open to all state employees. As such, it is carefully monitored and subject to scrutiny. It is safeguarded against a host of offending practices often found in the unmonitored 403b plans sold by salespeople in our buildings. Some of the salespeople who have been allowed by the city to operate in our schools have been known to deceptively lure members into long-term contracts with excessive fees and hidden “surrender” charges using deceptive sales practices. While some salespeople are not deceitful, many are.
The issue of 403b salespeople wandering in our schools looking for clients has gotten so out of hand that in the last contract, the BTU negotiated the following agreement:
Any vendors seeking to solicit business from teachers or sell products to teachers shall remain in the main office and shall be prohibited from entering teacher’s rooms or teacher lounges.
The salespeople are permitted by law to operate in the city, so we cannot keep them out of the buildings. They and their plans are largely unregulated and unmonitored — and for this reason we warn you to do your homework before signing any contract with them. The plans have no special imprimatur from the city or any licensing bureau. Please email Richard Stutman with questions or read more information.
The New York Times recently reported on this topic, and those in the market to invest in any of the aforementioned products, might find this recent article cause for caution (emphasis ours):
Schoolteachers and others who pursue careers of service in exchange for modest paychecks get lightly regulated retirement plans that often charge excessive fees.
Margaret Jusinski first got to know her investment broker through the breakfasts he provided when he visited her public school in the leafy suburbs of New Jersey, where she teaches middle-school children computer coding and how to build robots made of Legos.
After the bagels, muffins and coffee, the broker made his sales pitch — and Ms. Jusinski bought it. So did many of her colleagues. The teachers only recently learned how much those meals actually cost them…
Continue reading the New York Times article.