The Teacher Retirement System (TRS) of Texas appears to be revising its recently proposed amendments to rules governing fees in Texas 403(b) plans. Among the forthcoming changes are revisions that address some of the major concerns industry leaders had expressed to the board during its last two public meetings.
TRS appears to be allaying those concerns in a move that Neese calls “a welcome change.” Significantly, TRS is sticking with its current rule allowing a 10-year surrender period (12 years with disclosure) at 10%, instead of its proposal to halve the penalty to five years and 5%. Additionally, TRS is opting to raise the caps it previously proposed on asset-based fees and split those caps into two categories, one for variable annuity (VA) products and one for non-annuity products (see chart below).
Asset Class | Previous Proposal | NEW PROPOSAL: Max Annual Asset-Based Fee for Variable Annuity Products/Investments | NEW PROPOSAL: Max Annual Asset-Based Fee for Non-Annuity Products/Investments |
Money Market | 1.40% | 1.90% | 1.65% |
Divesified Bond | 1.75% | 2.25% | 2.00% |
Asset Allocation | N/A | 2.25% | 2.00% |
Large Cap U.S. Equity Small/Mid Cap U.S. Equity | 1.75% 1.75% | 2.25% 2.45% | 2.00% 2.20% |
International Equity Global Equity | 2.05% 2.05% | 2.55% 2.55% | 2.30% 2.30% |
Real Estate | N/A | 2.60% | 2.35% |
Other | N/A | 2.70% | 2.45% |
TRS filed the revised rulemaking on Sept. 11 and it is scheduled for formal publication in the Texas Register on Sept. 22. There will then be a new 30-day public comment period, after which the board is expected to vote on the new proposed rulemaking at its Oct. 27 meeting in Austin.
Ray Harmon, Esq., is government affairs counsel for NTSA.
- Log in to post comments