The NYC Board of Education offers only one 403(B) carrier; the TRS of the City of New York. The TRS offers only two investment options: a. a fixed interest account. and b. a general equities account. A participant may change future contributions every three months. Accumulations may be transferred no more rapidly than 1/12 of the account balance over 12 months. The employer says "take it or leave it".

I want to start a class action to force the Board of Education to offer more investment choices. Please recommend three lawyers.

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[This message has been edited by jlf (edited 05-15-99).]

While not a 403(B) or government plans expert by any stretch of the imagination, I am curious to know just what the basis would be for the suit? Under the standard ERISA 404© rules (which may not apply here--I don't do governments :-) ) a failure to offer three alternatives would kill the ability to relieve the fiduciary from liability for poor performance. But, by itself, it would not generate any cause of action for the employees unless it could be shown that the investments selected did not meet the standards expected of the plan fiduciary.

ERISA does not apply to governmental plans. I believe we are entitled to a reasonable choice of investment options as well as a reasonable (flexible) exchange program. THIS IS A VOLUNTARY SALARY REDUCTION PLAN. Can a legal case be made? There must be attorneys out there that have an opinion!!



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[This message has been edited by jlf (edited 05-17-99).]

There may be attorneys that have an opinion (in fact, I'm pretty sure there are), but my suspicion is still that there simply is not a requirement, per se, that you be offerred a variety of options in a 403(B) plan. The fact that the plan is voluntary, if anything, would seem to make establishing a case *tougher* outside of ERISA.

The mere fact that the plan may be far from optimal doesn't automatically give rise to a legal claim. So I suspect that any attorney would be looking for some other facts beyond those you've given in order to create a case.

WHILE GOVERNMENTAL PLANS ARE NOT SUBJECT TO ERISA, MANY OF THE SAME STANDARDS APPLY THROUGH THE STATE'S COMMON LAW. I WANT TO LEGALLY ASCERTAIN IF THESE STANDARDS ARE BEING BREACHED. PLEASE E MAIL THE NAME OF AN ATTORNEY WHO MAY EXIBIT SOME INTEREST.

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I beleive there is some confusion about what TRS actually is. TRS may be the Teacher Retirement System, which in fact may be your Pension. As such they may not be required to offer investment options at all.

A 403(B) 1 is an Annuity... A 403(B)7
is a Mutual Fund Custodial Account... Both of these accounts are nonERISA accounts that YOU personally establish & manage through a salary reduction aggreement with your employer... It is like a super IRA.... It is done in addition to your TRS (which may be a defined benefit and not defined contribution plan).. Check with your payroll dept for companies with a payroll slot you may find T. Rowe Price,
VALIC, TIAA CREFF, NY LIFE ect....

You may find you have more options than you know what to do with


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mcyr636144@cs.com

[Note: This message has been edited by CVCalhoun]

In addition to providing a DB pension, the TRS of the City of New York has been designated by the Board of Education as the sole carrier for TSA/403(B). No other 403(B) carriers are allowed in. This has been the fact ever since the TSA Program began for NYC pedagogues in 1970!!!

Now that I have clarified the facts for you would you be kind enough to provide me with the names of some lawyers so I may start the Class Action?

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The question really is whether what is going on is illegal. In many instances, either state trust law does not apply to 403(B) plans because they are not considered trusts, or state law specifically permits the kind of section 403(B) arrangement you describe. Since ERISA fiduciary standards do not apply to governmental 403(B) plans, you may end up with no fiduciary standards at all applying -- in which case there is no legal basis for a class action or any other type of lawsuit.
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