Section 457 deferred compensation plans for governmental employees frequently involve group variable annuities that are endorsed by unions and associations. Given the cost and performance of such annuities, should they be offered by 457 plans and are endorsements appropriate?
It is time for the pension industry to wake up realized that 457 plans are being used as funding sources for these unions. Plan Sponsors have given up the fight up and they are handing over the plans to the unions to endorse who should be the provider of service without any bid process. As for the fees, they are making a killing and the poor participants do not have a clue what they are paying. In these times of low returns over the past couple of years the participants are left to pay. Time for reform of the 457 plan. Plan sponsors and participants need to make the request. The unions are in bed with the investment managers and no one will cry "FOUL".
