PART 8 (out of 10)
Not so fast. First the New Chair
Not everyone accepted SST Consultants with open arms. Along with a new consultant LAUSD appointed a new Chair. According to the Bylaws our committee Chair was the LAUSD Benefits Administrator. David moved to another position and his assistant was appointed.
A “fight” between the new Chair and the lead consultant ensued before the committee chairs were warm. It was a petty issue on emails among committee members and SST. The new Chair chastised Barbara for sending the agenda to the committee members, because the Chair had not approved it first. Who cares? Agenda items were never a problem before. If there were changes we sent it out again. But another problem escalated. Two meetings were cancelled with a day’s notice which enraged members. Problems shifted from Mercer to this new Chair. But the good news was this bona fide control freak retired.
Benefits appointed a temporary Chair. She was great. She suggested this author serve as the alternate Chair. The committee agreed. This helped with scheduling of meetings. But something a little more important transpired—she demonstrated respect for the members’ time and commitment.
We went straight to work on revising and updating the Investment Policy Statement (IPS). We could not make those fund changes mentioned above without the updated IPS approved by the CFO. The IPS is an important legal document which guides and focuses the committee on monitoring the plan with the assistance of the financial consultant. The IPS accomplishes four things:
- Provides the objectives and purposes
- Assesses the needs of the plan’s participants
- Creates guidelines for how investment options are selected and illuminated.
- Establishes procedures for monitoring the investment policy on a continuous basis
While we were waiting for the CFO’s approval we had plenty of other work to do. Our committee was active, creative and too idealistic. We sometimes forgot who we were working for—a huge bureaucracy. But we pressed on regardless.
We did not get an education plan from AIG-VALIC. In response we created our own ad hoc education committee. For examples, we started from public relations ideas to make sure all employees were made aware of a new plan, knew the difference between a 403b and a 457b, using the district’s TV station to broadcast small video clips and showed how costs eat into a retirement nest egg. These ideas were in the discussion phase with some resistance by district staff because of their decades old fear with confusing publicizing and endorsing. Our financial education plan was the only item that became a reality, thanks to the UTLA rep (Teacher’s Union), Sandy Keaton.
Sandy and I stopped our 403baware meetings because of our committee involvement. Sandy became UTLA’s Retirement Issues Chair. As part of our committee’s education initiative she began coordinating and implementing investment workshops at UTLA headquarters. She asked the 457b reps, SST and outside professionals to provide presentations. These professionals must be on the same philosophical investment page as our committee to steer educators away from TSAs into low-cost broadly diversified mutual funds. She offered about two all-day Saturday investment workshops a year.
In the meantime AIG-VALIC started reporting problems accessing schools. Most of the 700 school site principals did not realize LAUSD had a new plan. Consequently the AIG-VALIC reps were shown the exit, preventing the reps from making presentations to staff. We discussed several ideas for publicizing the 457b, passed a motion and sent it to the CFO as well.
Several months elapsed and our healthy discussions disintegrated into a frustrating buzz. Without approval from the CFO we couldn’t change any of the funds. The IPS was in the land of CFO administrivia, unsigned.
But first there was good news. Benefits administration appointed a new permanent Chair—it was the venerable Mr. George Tischler. George was welcomed. His honeymoon didn’t last, however. He was soon engulfed with angst and frustration because the CFO was ignoring our IPS motion. Now the problem shifted to the CFO! Two of our most coveted members threatened to quit, believing that their time was not valued.
To be continued….SST to the rescue!