Our Rating System Explained
The goal of the 403bwise district plan rating project is to shine a spotlight on K-12 403(b). We want to bring attention to school districts like Montgomery County Public Schools in Maryland who do it right, and school districts that are in need of plan improvement.
Our initial objective is for every K-12 employee to have access to both unbiased information (read: no sales agents trawling teacher lounges and email in boxes), and to have at least one quality, low-cost investment choice. Our ultimate goal is that every district has a bidded single, low-cost 403(b) vendor, and a bidded single, low-cost 457(b) vendor. Why should the K-12 market be different than the 401(k) market?
Note that district grade is for quality of 403(b) vendors only. Currently our grading does not account for quality of 457(b) vendors.
Search for your district's plan »
The Process
We began by rating each vendor using a red light-green light system: green (go as in good), yellow (caution as in be careful), and red (stop as in avoid). We further subdivided by “+” and “-”. Green and “+” is the highest rating. Red and “-” is the lowest. Click “info” in colored vendor charts below for more details.
Note: As of right now we are only grading the 403(b) vendors.
Note: Some vendors that are rated yellow or lower when part of a multi-vendor plan will lower, often drastically, their pricing when part of a single vendor plan. A good example of this is Chicago Public Schools where Corebridge, a red-rated vendor, is the record keeper for this quality, low-cost plan.
Green +
info ↓
Load: no load
Asset-based fees: none
Account fee: $80 or less excluding compliance add‑ons
Investment fees: ability to build an index portfolio
for under 0.25%
Transparency: open to answering questions,
no sketchy affiliations
Cross-selling: does not allow cross‑selling of
commission based products
Representative: not required
Fiduciary: not provided by vendor
Fidelity
T.Rowe Price
Vanguard
Green
info ↓
Load: No upfront or
backend commissions or surrender charges
Asset-based fees: under 0.40%
Account fee: $80 or less excluding compliance add‑ons)
Investment fees: ability to create an indexed based
portfolio for under 0.25%
Transparency: open to answering questions,
no suspect affiliations
Cross-selling: does not allow cross‑selling of
commission based products
Representative: not required
Fiduciary: not provided by vendor
Aspire (no advisor)
CalSTRS Pension2
TCG FinPath
WEA Member Benefits
Green -
info ↓
Load: no load
Asset-based fees: under 0.40%
Account fee: $80 or less (excluding compliance
add‑ons)
Investment fees: ability to invest in a target date
fund for less than 0.60%
Transparency: open to answering questions,
no suspect affiliations
Cross-selling: does not allow cross‑selling of
commission based products
Representative: not required
Fiduciary: not provided by vendor
Miscellaneous: active managers with or without
index funds
American Century
Franklin (Direct)
Yellow
info ↓
Load: no upfront or backend
commissions or surrender charges
Asset-based fees: over 0.40%
Account fee: $80 or more
Investment fees: few or no index funds, primarily
actively managed funds, revenue share not rebated
Transparency: questionable practices, affiliated with
a red vendor
Cross-selling: allows cross‑selling of
commission-based products
Representative: Not required
Fiduciary: Option to appoint may exist
Miscellaneous: May have had regulatory issues
CSD Retirement
CTA
Franklin (Advisor)
IPC
Lincoln PDA
NEA Invest Myself (Security Benefit)
PenServ/PenSelect (no advisor)
PlanMember PC
SFFCU
TIAA-CREF
Red +
info ↓
Load: might have front‑end load
or surrender charges
Asset-based fees: generally over 1.00% or large spread
product
Account fee: may vary, generally $60 and under
Investment fees: lots of actively managed funds,
revenue share not rebated
Transparency: questionable sales practices, rep required
Cross-selling: allows cross‑selling of commission based
products
Representative: required
Fiduciary: representative not required to act as a
high‑level, full‑time fiduciary
Miscellaneous: non annuity‑based products
American Funds
Amundi Pioneer
Edward Jones
Franklin (Commission)
Fringe Benefit Consortium (FBC)*
Invesco
Kades-Margolis
Lincoln Investment
Orion
PenServ/PenSelect (advisor)
PFS Investments (Primerica)
PlanMember
Putnam Investments
Waddell & Reed, Inc.
Red
info ↓
Load: might have front‑end
load or surrender charges
Asset-based fees: generally over 1.00% or large
spread product
Account fee: may vary, generally $60 and under
Investment fees: lots of actively managed funds, revenue
share not rebated
Transparency: questionable sales practices, rep required
Cross-selling: allows cross‑selling of commission
based products
Representative: required
Fiduciary: representative not required to act as a
high‑level, full‑time fiduciary
Miscellaneous: commission‑based annuity products
(only addition)
American Fidelity
Ameriprise Financial
Brighthouse (formerly MetLife)
Corebridge Financial (formerly AIG and formerly VALIC)
Equitable/AXA
ESI Education
GWN
Horace Mann
Minnesota/EFS Advisors
Pacific Life Insurance Group
Security Benefit Group
Thrivent Financial
VOYA Financial
Red -
info ↓
Commissioned‑based indexed annuity providers
Americo
Athene
FBC National Life Group*
Great American
Midland National
National Life Group
ValuTeachers**
Next we look to see if employer has gone through a thoughtful bidding process (often called Request for Proposal) and narrowed its vendors down to just one “green” rated company or a company that has dropped pricing to be in line with “green” rated companies. When forced to compete, high-cost vendors will lower pricing. Next we look at how many green, yellow and red vendors are available. Finally we assign an A through F rating.
* The FBC stands for Fringe Benefit Consortium, a public entity under the San Diego County Office of Education that is designed to secure employee benefits at lower costs for its member employees.
We believe the core FBC mutual fund platform (currently with recordkeeper Empower) is a reasonable, low-cost product and we would ordinarily rate it as Green (due to its fee structure). However, the leadership of the FBC, in our opinion, has eschewed their fiduciary duties and began offering additional product offerings that are not consistent with a Green vendor. They are also going to allow cross-selling of products by a Red vendor.
The offering of National Life Group products (a red vendor) and PlanMember Services products (a Red+ vendor) along with the decision to allow other financial products to be sold by PlanMember in a recent contract approved in January 2024 has caused 403bwise to re-evaluate whether school employees should even consider the FBC.
While we hope the leadership realizes the error of their ways, we don’t anticipate this will happen anytime soon. With so many other great options generally available in FBC districts (CalSTRS Pension2, Fidelity, Vanguard, Aspire (non-advisor)) we believe you are better served in one of those options.
You can read more about our opinion of this decision here.
** ValuTeachers is not a vendor though they represent themselves as one. ValuTeachers is a front for the sale of Fixed Indexed Annuity products usually from National Life Group (but occasionally from other vendors as well). Because they represent themselves as a vendor and because some school districts mistakenly list them as a vendor, we feel it’s important to make unsuspecting educators aware of who they are and how we would rate the products they usually sell.
Omni & TSACG Compliance Services
Third party administrator Omni & TSACG Compliance Services offers a widely adopted 403(b) program called Preferred Provider Program (P3). They tout it as a “significant cost savings-no hidden fees” plan. Those are their words not ours. The 35-company list is littered with “Red” vendors. There are a few “Green” vendors including Aspire and Vanguard. Unfortunately, we have seen vendor lists like the one for the Rochester City School District in Rochester NY that lack Vanguard. At best we would rate P3 as a C. If Aspire and Vanguard are missing it could be a D or F. School districts can and should do better.
Record Keeper
These companies provide back-office services which include: plan website maintenance, process contributions, approve distributions, deduct fees, etc. These companies offer record keeping services to plan sponsors but don’t generally offer retail products within 403(b) plans. Thus they don’t neatly fit into our Traffic Light system. Knowing they are the record keeper tells you little about how good or bad the plan might be. For example, Voya is a red vendor, yet they record keep for Los Angeles Unified District’s excellent 457(b) plan. They are also the record keeper for the green-rated CalSTRS Pension 2 403(b) product.
- Alight
- Empower
- Fidelity
- Lincoln Financial Group
- Mass Mutual
- MissionSquare
- Nationwide
- Newport Group
- Principal
- Prudential
- TCG
- Voya
The Grades
Bidded single vendor
AThe gold standard. School employer has gone through a thoughtful bidding process (often called Request for Proposal) and narrowed its vendors down to just one “green” rated company, or a company that has dropped pricing to be in line with "green" rated companies. See vendor ratings below. Example: Montgomery County Public Schools in Maryland.
Note: It is often difficult to obtain details about the bidding process. Our ratings assume the process was informed and thoughtful, but we realize that is not always the case. Additionally, some winning vendors engage in cross-selling of other financial products. We will work to point this out and factor it into our rating.
Bidded multi-vendor
BSteps have been taken to offer a decent plan. Plan has been put out to bid but more than one vendor has been selected. Winning vendors offer reasonably priced products. Example: Philadelphia City SD in Pennsylvania.
Note: It is often difficult to obtain details about the bidding process. Our ratings assume the process was informed and thoughtful, but we realize that is not always the case. Additionally, some winning vendors engage in cross-selling of other financial products. We will work to point this out and factor it into our rating.
At least one green vendor
CIncludes at least one “green” rated vendor. The problem is that participants are rarely notified about this vendor. Instead, sales agents from other vendors pitch their products in staff lounges and via email. Example: Amherst in Massachusetts.
At least one yellow vendor
DZero “green” rated vendors available. At least one “yellow” rated vendor available. Example: Abbott ISD in Texas.
Note: several of the high-cost vendors offer low-cost options (Lincoln Investments offers Lincoln PDP; Security Benefit offers NEA Direct Invest; PlanMember offers PlanMember PC) but these are rarely promoted to participants. So there is a chance a lower-cost product is available at this employer. Read When Bad 403(b) Vendors Offer Good Investing Choices.
All red vendors
FOnly “red” rated vendors available. Note that if Aspire is offered (a "green" rated company), participants are forced to use an assigned advisor or advisors which adds to investing costs. Example: Riverview Gardens in Missouri.
Needs more information
NWe need more information about the plan in order to assign a grade. Specifically we need to know investment fees, other plan fees, and if plan was put out to bid. This info can be emailed to us at hello(at)403bwise.org along with the state and the district of the plan.
Putting a plan out to bid can result in lower investment costs, and elimination of sales agents trawling school lounges and employee email in boxes.