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Mandatory pension funds: What are your thoughts?

Started by Laura Reed27 · · 👁 13 views · 349 replies

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Participants Laura Reed27frozenwalker4dustyjackal9Gerald Thomas11Kenneth Myers10vivideagle91Timothy Castillo6Mark Sullivan62analogtinker75Terry Torres6crimsonotter32Terry Cook3silentharbor60wiredviper76rowdyravenDavid Roberts8George Miller22ironsurfer10brightrider8Kimberly Nguyenelectricsailor13Steven ReedPaul Wood69Ronald Allen …
ironsurfer10 ironsurfer10 Active Member
104 messages
joined Dec 2007
#61 ·
Steven Reed said:I’ve always been a firm believer that if someone is up to something illegal, you report it. If anyone ever came to me asking for something shady, I’d make sure the FBI and every major news outlet in the country heard about it. People seem to think that standing up to a bank means they'll never get a loan again—which might be true for that specific branch, but thank God we have enough banks in America now to just shop around elsewhere. 🤷

Exactly. We actually had a dispute with Erste Bank quite recently. One of our members—who was targeted by those sleazy street agents trying to lure people in with promises of easy credit—has already filed a formal complaint with the CFPB, and it's currently under investigation. We also had someone tell us that he switched from our Vanguard fund over to Erste Bank because he was acting as a guarantor for his daughter's loan, only for her to be denied the credit anyway! We gave him the same advice: file a complaint with the regulators and see what happens. Honestly, Erste Bank has become incredibly arrogant this year, likely just because they had such high returns last year.
Steven Reed Steven Reed Regular
354 messages
joined Dec 2014
#62 ·
—their returns were massive precisely because they were small enough to maneuver—they could pivot faster than anyone else on the market
Now we’ll see what happens once they've ballooned with huge deposits—will they actually deliver the same kind of performance they saw last year? 🤷—do I really need to remind you about how Wells Fargo performed over the last couple of years😉—that was my Fund
.
On a serious note, if people are being coerced into using specific Asset Management firms for their accounts or loans, that absolutely needs to be reported to the CFPB!
Listen, folks—this is your retirement. Nobody has the right to force you to hand it over to someone you don't trust!
ironsurfer10 ironsurfer10 Active Member
104 messages
joined Dec 2007
#63 ·
Bio info???? Where did you move to?
Steven Reed Steven Reed Regular
354 messages
joined Dec 2014
#64 ·
I did—but not because anyone forced my hand; it was strictly about the terms and the fees 😘
Paul Wood69 Paul Wood69 Newcomer
1 message
joined Dec 2007
#65 ·
Hey everyone, hope you're all doing well. I've been living abroad for quite some time now, but I'm actually heading back to the States in a few months to start a new job.
To be honest, I can't help but feel like this whole system—specifically the second and third pillars—is nothing more than a massive shake-down. It feels like the government is basically saying, "Dear citizens, we've already squandered your retirement funds, so it would be great if you could just throw even more money into these accounts since we aren't planning on paying you back anyway..."

That’s just my take on the situation, but I'm still stuck with a practical dilemma: WHICH SECOND PILLAR SHOULD I CHOOSE?
I was leaning toward Erste Bank because I read somewhere that a lot of people have been pulling their money out of Vanguard. Does anyone know how Wells Fargo is performing in this regard?

Any advice from the experts here would be greatly appreciated...
ironsurfer10 ironsurfer10 Active Member
104 messages
joined Dec 2007
#66 ·
With an attitude like that, you aren't going to get very far, but hey, everyone is entitled to their own opinion...

Here are the returns through November 30, 2007:

ROMF -5.33%; since inception 7.69%
Vanguard -3.83%; since inception 6.77%
Zions Bank -5.40%; since inception 7.60%
Erste Bank -4.07%; since inception 7.88%

When you're picking a fund, you really ought to look at the returns since its inception; that’s a much better indicator than just looking at what happened this year. Erste Bank shows the highest return since starting, though that's partly because they haven't been operating quite as long as the others. ROMF has been around for about five years now—the same length of time these funds have existed—and it actually held the top spot for two of those years, only stumbling a bit last year.

If you want some more detailed advice, feel free to shoot me a private message!
Kimberly Nguyen Kimberly Nguyen Regular
543 messages
joined Jul 2009
#67 ·
Things have shifted quite a bit recently

Fund...........................% 6mo..... % 12mo..... %YTD

Asset Management............................... 1.22........ 5.47........ 6.96
Erste Bank..................... 0.25........ 4.77........ 7.96
Zions Bank..... 0.40........ 6.42........ 7.71
Wells Fargo............... 0.58........ 6.13........ 7.73
ironsurfer10 ironsurfer10 Active Member
104 messages
joined Dec 2007
#68 ·
Where did you manage to dig up this data? It doesn't seem quite right to me... at least, it isn't lining up with the figures I've been looking at...😕
Kimberly Nguyen Kimberly Nguyen Regular
543 messages
joined Jul 2009
#69 ·
usportfolio.com
ironsurfer10 ironsurfer10 Active Member
104 messages
joined Dec 2007
#70 ·
As far as I'm aware, the RMF isn't 6.13, it's actually closer to 6.90 😕
Ronald Allen Ronald Allen Active Member
160 messages
joined Oct 2010
#71 ·
Steven Reed said:—their returns were massive precisely because they were small enough to maneuver—they could pivot faster than anyone else on the market
Now we’ll see what happens once they've ballooned with huge deposits—will they actually deliver the same kind of performance they saw last year? 🤷—do I really need to remind you about how Wells Fargo performed over the last couple of years😉—that was my Fund
.
On a serious note, if people are being coerced into using specific Asset Management firms for their accounts or loans, that absolutely needs to be reported to the CFPB!
Listen, folks—this is your retirement. Nobody has the right to force you to hand it over to someone you don't trust!

Nobody is forcing anyone to switch to an Asset Management firm for any reason. At least, from everything I've heard, that just hasn't happened. I mean, when people take out loans, they might sign up for insurance policies or put down a deposit as collateral—that's standard. But everything else regarding Asset Management is, like you said, totally up to you. No one can make you move your funds there. It's just like choosing a specific savings plan or something... it's a personal choice.
ironsurfer10 ironsurfer10 Active Member
104 messages
joined Dec 2007
#72 ·
Ronald Allen said:Nobody is forcing anyone to switch to an Asset Management firm for any reason. At least, from everything I've heard, that just hasn't happened. I mean, when people take out loans, they might sign up for insurance policies or put down a deposit as collateral—that's standard. But everything else regarding Asset Management is, like you said, totally up to you. No one can make you move your funds there. It's just like choosing a specific savings plan or something... it's a personal choice.

See, I don't think you quite have the full picture here. While it *should* be a matter of personal choice, in practice, it often isn't. Sometimes an employer will even make certain fund selections a condition of employment if you want the job, not to mention how credit terms are handled... where exactly are you living? Moving money from one fund to another incurs fees (which go to the advisors), and it turns out that almost everyone—from bank employees to various small business owners—acts as an advisor or agent for certain funds just to earn commissions.
Michael Johnson6 Michael Johnson6 Member
13 messages
joined Jan 2008
#73 ·
Mark Sullivan62 said:Well, I didn't take out a loan, so whatever.

If I had, and if they came looking for me, believe me, we’d be front-page news by tomorrow morning.

And those folks over at Chase have probably already read my entire inbox cover to cover by now.

Chase actually ended up paying my parking ticket for $27 because their completely incompetent clerk kept me stuck there for an hour and a half just to handle a five-minute task.

Mind you, I am part of the Amazon fund, so they probably won't come sniffing around my business like that...

I’m guessing JPMorgan Chase didn't pay that fine—it was "their incompetent clerk" who did.🙂
Ronald Allen Ronald Allen Active Member
160 messages
joined Oct 2010
#74 ·
ironsurfer10 said:See, I don't think you quite have the full picture here. While it *should* be a matter of personal choice, in practice, it often isn't. Sometimes an employer will even make certain fund selections a condition of employment if you want the job, not to mention how credit terms are handled... where exactly are you living? Moving money from one fund to another incurs fees (which go to the advisors), and it turns out that almost everyone—from bank employees to various small business owners—acts as an advisor or agent for certain funds just to earn commissions.

We’re talking about retirement accounts here, right...? Mandatory plans, voluntary ones, and all that little stuff—nobody is forcing those choices on anyone. What actually gets forced are things like opening checking accounts just to get a loan approved, or being pushed into insurance policies, or having a chunk of your loan tied up in a deposit as collateral so the bank has a way to collect if you default... When privatization kicked in and we suddenly had a bunch of different retirement funds, people actually had a choice. Those who didn't pick one? The government just shoved them into an Amazon retirement fund. So, it wasn't the bankers screwing you over—it was the government... ☕
Ronald Allen Ronald Allen Active Member
160 messages
joined Oct 2010
#75 ·
As for employers, I mean, only those really clueless bosses who make their money by forcing you into whatever fund they pick out actually make it a requirement... So far, I haven't met anyone who was forced into an OMF, just some folks who chose a specific one because it snagged them better interest rates on loans or credit cards or whatever... Which, again, is just their own choice. Like at some banks, if you open a loan, they tell you that you have to open a checking account and move your direct deposit over to them, but in exchange, they'll knock a bit off your interest rate...
Kimberly Nguyen Kimberly Nguyen Regular
543 messages
joined Jul 2009
#76 ·
Ronald Allen said:We’re talking about retirement accounts here, right...? Mandatory plans, voluntary ones, and all that little stuff—nobody is forcing those choices on anyone. What actually gets forced are things like opening checking accounts just to get a loan approved, or being pushed into insurance policies, or having a chunk of your loan tied up in a deposit as collateral so the bank has a way to collect if you default... When privatization kicked in and we suddenly had a bunch of different retirement funds, people actually had a choice. Those who didn't pick one? The government just shoved them into an Amazon retirement fund. So, it wasn't the bankers screwing you over—it was the government... ☕

Trust me, you have no idea what’s actually going on behind closed doors... more and more banks (never putting it in writing, of course) are making it a "condition" for getting a loan. Especially for people who are already nervous about their creditworthiness, these banks push them to move their direct deposits and even their 401(k)s or Democratic Party-affiliated pension schemes over to them. If they don't have one, the bank basically forces them to open one just to get through the door...

I know this longtime acquaintance of mine—she runs a highly reputable business with a massive cash flow—and let me tell you, one bank actually demanded that she force her employees to switch their payroll, their 401(k)s, and their other retirement accounts over to them. Their "reward" for this blatant coercion? They promised her the absolute best credit terms and the lowest interest rates possible. It's predatory, plain and simple.
Ronald Allen Ronald Allen Active Member
160 messages
joined Oct 2010
#77 ·
Kimberly Nguyen said:Trust me, you have no idea what’s actually going on behind closed doors... more and more banks (never putting it in writing, of course) are making it a "condition" for getting a loan. Especially for people who are already nervous about their creditworthiness, these banks push them to move their direct deposits and even their 401(k)s or Democratic Party-affiliated pension schemes over to them. If they don't have one, the bank basically forces them to open one just to get through the door...

I know this longtime acquaintance of mine—she runs a highly reputable business with a massive cash flow—and let me tell you, one bank actually demanded that she force her employees to switch their payroll, their 401(k)s, and their other retirement accounts over to them. Their "reward" for this blatant coercion? They promised her the absolute best credit terms and the lowest interest rates possible. It's predatory, plain and simple.

Man, that’s kind of shady. I mean, yeah, it's true, they try to bait you into switching, but at the end of the day, it's still a choice. People usually jump ship when they're told the deal is better. My cousin switched his retirement over to JP Morgan Chase because they offered him a way better loan, plus he was already running his business through them, so it was really just his call... I haven't heard anything specific regarding companies yet, but if your boss lays out the terms for switching your benefits and hints that things might look better for you, you'll probably do it. But I also think it comes down to the employer. If they actually care about their workers, they'd probably put in the effort to find a bank that offers decent terms for everyone involved...
ironsurfer10 ironsurfer10 Active Member
104 messages
joined Dec 2007
#78 ·
@Ronald Allen, I have to be honest—you’re really getting under my skin here. No one is disputing the fact that choosing your pension fund is a matter of personal preference according to federal law. Of course it is. But let's look at the reality: when you walk into a place like Chase, feeling a bit desperate and asking for a mortgage, and they tell you that getting approved depends on switching your retirement plan over to their fund, what are you actually going to say? "I'm sorry, but I already have a provider and I'd really prefer to stay put"? Yeah, right. Most people will jump through whatever hoops they have to just to secure that loan. That’s the point I'm making! A bank teller gets a $133 gross commission
for every single person they convince to move their funds over to them.
Kimberly Nguyen Kimberly Nguyen Regular
543 messages
joined Jul 2009
#79 ·
Ronald Allen said:Man, that’s kind of shady. I mean, yeah, it's true, they try to bait you into switching, but at the end of the day, it's still a choice. People usually jump ship when they're told the deal is better. My cousin switched his retirement over to JP Morgan Chase because they offered him a way better loan, plus he was already running his business through them, so it was really just his call... I haven't heard anything specific regarding companies yet, but if your boss lays out the terms for switching your benefits and hints that things might look better for you, you'll probably do it. But I also think it comes down to the employer. If they actually care about their workers, they'd probably put in the effort to find a bank that offers decent terms for everyone involved...

My money, my call. 👍
Look, an employer really, truly has absolutely zero business meddling in this. What business do they have explaining to me which mutual fund is "better"? One fund might show higher returns today, while another takes the lead tomorrow... I'm looking at security and stability, and frankly, my boss has nothing to do with that. They shouldn't even know which specific fund I've chosen! That's why the contributions just go through the Social Security Administration or the payroll provider, and they pass them along to the provider. It's my life savings, not a group decision.

ironsurfer10 said:@Ronald Allen, I have to be honest—you’re really getting under my skin here. No one is disputing the fact that choosing your pension fund is a matter of personal preference according to federal law. Of course it is. But let's look at the reality: when you walk into a place like Chase, feeling a bit desperate and asking for a mortgage, and they tell you that getting approved depends on switching your retirement plan over to their fund, what are you actually going to say? "I'm sorry, but I already have a provider and I'd really prefer to stay put"? Yeah, right. Most people will jump through whatever hoops they have to just to secure that loan. That’s the point I'm making! A bank teller gets a $133 gross commission
for every single person they convince to move their funds over to them.

This isn't how we carry on a conversation here.
Mark Sullivan62 Mark Sullivan62 Active Member
147 messages
joined Jul 2009
#80 ·
Michael Johnson6 said:I’m guessing JPMorgan Chase didn't pay that fine—it was "their incompetent clerk" who did.🙂

Look, I sent an email over to JPMorgan Chase, and by the next day $27 the money was gone from my account, though it didn't show up anywhere to indicate who actually processed the payment

And honestly, I couldn't care less who did it,

you seem to be assuming my personal banker—who happens to be the manager—is somehow responsible for this incompetent junior staffer I'm talking about

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