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Nationwide scams millions of workers out of their retirement savings

By Patrick following x   2018 Jan 12, 3:07pm 1,092 views   16 comments   watch   sfw   quote     share    


My wife got a job where the 401k is limited to certain mutual funds offered by Nationwide.

The mutual funds themselves are OK, some are even the low-cost Vanguard index funds that themselves take only 0.1% (one tenth of a percent) as "Gross Expense Ratio". Vanguard is good.

The scam is that Nationwide tacks on a "Net AMC/Asset fee" of 3% or so for every single fund. That's thirty times what Vanguard itself is charging. This is legalized theft!

So in order to take advantage of the 401k plan, you have to pay 3% to Nationwide for doing basically nothing. If the fund returns, say, 2% one year, you not only get nothing, you paid 1% to get nothing because Nationwide stole all your profits and then some.

I'm confident we can track this kind of highway robbery back to donations to certain Congressmen. Maybe all of them.
1   Heraclitusstudent   ignore (1)   2018 Jan 12, 3:24pm   ↑ like (2)   ↓ dislike (0)   quote        

See if she can open a self-directed brokerage account for the 401K.
Also complain to management, because not all 401K are like this and the company can certainly choose what they offer employees.
2   anonymous   ignore (null)   2018 Jan 12, 3:47pm   ↑ like (1)   ↓ dislike (0)   quote        

I wonder how much of that 3% is kicked back to her employer?
3   Patrick   ignore (0)   2018 Jan 12, 3:48pm   ↑ like (0)   ↓ dislike (0)   quote        

Good point. That's probably central to the scam.

Money flow: employee -> Nationwide -> employer and congressmen
4   anonymous   ignore (null)   2018 Jan 12, 4:08pm   ↑ like (0)   ↓ dislike (0)   quote        

Move the 401K money to a personal Rollover IRA.
5   Quigley   ignore (0)   2018 Jan 12, 4:24pm   ↑ like (1)   ↓ dislike (0)   quote        

I agree move any funds to a IRA and just don’t participate in the scam.
6   Strategist   ignore (1)   2018 Jan 12, 6:30pm   ↑ like (0)   ↓ dislike (0)   quote        

Patrick says
So in order to take advantage of the 401k plan, you have to pay 3% to Nationwide for doing basically nothing. If the fund returns, say, 2% one year, you not only get nothing, you paid 1% to get nothing because Nationwide stole all your profits and then some.

I'm confident we can track this kind of highway robbery back to donations to certain Congressmen. Maybe all of them.


Defeats the purpose of tax benefits. Cheaper to just pay the tax in some cases.
7   anonymous   ignore (null)   2018 Jan 12, 7:07pm   ↑ like (0)   ↓ dislike (0)   quote        

fixing one persons situation does not fix the fact that they are skullfucking absolutely everyone. Those responsible should all be taken out back and shot
8   anonymous   ignore (null)   2018 Jan 12, 7:07pm   ↑ like (0)   ↓ dislike (0)   quote        

At a start-up I worked at I took charge of the 410k program and got us out of high fee and underperforming Oppenheimer funds into a more reasonable plan. The HR guy was clueless and easily duped by the 401k sales people. But once I pointed out the shitty plan, there was no resistance to change it. No conspiracy, just a decision maker out of his element.
9   anonymous   ignore (null)   2018 Jan 12, 7:07pm   ↑ like (0)   ↓ dislike (0)   quote        

Strategist says

Defeats the purpose of tax benefits. Cheaper to just pay the tax in some cases.


But you'd forgo the company match which is free money.
10   HEYYOU   ignore (17)   2018 Jan 12, 7:46pm   ↑ like (0)   ↓ dislike (0)   quote        

Certainly one could call any Republican or Democrat at the Local to the Federal level & the scam would immediately be terminated.
They've always been ready to serve the citizenry.
11   anonymous   ignore (null)   2018 Jan 12, 9:17pm   ↑ like (1)   ↓ dislike (1)   quote        

Jew onwed and operated company?
12   georgeliberte   ignore (0)   2018 Jan 13, 6:51am   ↑ like (0)   ↓ dislike (0)   quote        

I use Nationwide for my Deferred Compensation plan and the return has been decent, but I will look into it more carefully.
13   bob2356   ignore (1)   2018 Jan 13, 7:00am   ↑ like (0)   ↓ dislike (0)   quote        

Patrick says

I'm confident we can track this kind of highway robbery back to donations to certain Congressmen. Maybe all of them.


Why do you hate free market capitalism?
14   Tenpoundbass   ignore (10)   2018 Jan 13, 7:01am   ↑ like (1)   ↓ dislike (0)   quote        

Everyone's finances is dictated by a Judgmental, Prejudice and Opinionated people that is the HR people nationwide.
You met your HR person when you got your Job. Would you trust that person's tip on a horse in a Race?
I know I wouldn't!
Yet we trust them find us cheap insurance that has OUR best interests, and to manage our retirement.

Makes no damn sense at all. These are all services we all should be buying from our Banker, and Insurance broker after got paid the going wage.
And not chump change, after that assfucking that is the benefits package taking 20% of your pay off the top.
15   WookieMan   ignore (0)   2018 Jan 13, 7:43am   ↑ like (0)   ↓ dislike (0)   quote        

anon_e0567 says
At a start-up I worked at I took charge of the 410k program and got us out of high fee and underperforming Oppenheimer funds into a more reasonable plan. The HR guy was clueless and easily duped by the 401k sales people. But once I pointed out the shitty plan, there was no resistance to change it. No conspiracy, just a decision maker out of his element.


This.

Just because someone owns/runs a business does not mean they'll make the most intelligent decision every time. That includes bigger companies with people exclusively trained in handling this stuff. There's a reason sales people can get paid the big bucks if they're good.

I've talked multiple times with the owner of my wife's company about their insurance plan. But because he's covered under his own wife's plan and so are the other owners they don't care. The plan is literally $100 under the deductible for the plan to be considered high deductible. Therefore my wife cannot fund a HSA at all. They could increase the deductible $100 (likely reducing their monthly premiums slightly - win for them with about 20 employees) and allow their employees to participate in an HSA plan and enjoy the tax advantages of those accounts.

It's a fucking win/win situation for all parties outside of a measly $100 deductible increase for the employee. You'll save that on the first $400 funded into an HSA. You can't fix stupid I suppose.
16   anonymous   ignore (null)   2018 Jan 13, 8:28am   ↑ like (0)   ↓ dislike (0)   quote        

Two words, Class action. If you win I want 10%.

I remember H&R block offering a product called express IRA's but the fees made it so you'd loss money. They got sued and lost. This was around 2005 when the product was offered.

More people should raise a stink about it at her work. It effects everyone, not just her, right?

Her situation is one reason it is nice to have a consumer protection agency.

But sounds like the consumer protection agency is being dismantled. I guess that is what happens when tax cuts are given to the rich. They have more money to pay off the lawmakers so that laws can be written or taken away to help them make even more money.




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