After 14 years working in the 403(b) business, there’s one thing I can tell you with certainty:
Most teachers have absolutely no idea what they are paying in fees.
And honestly? Many were never really told.
I still review 403(b) accounts for NJ teachers all the time, and one company in particular always stands out. The fees are consistently shocking. In many cases, the underlying investment fees alone are over 2% annually. That doesn’t even include some of the other costs layered into the product.
For comparison, many low-cost index funds today cost under 0.10%, and you can have a professionally managed account for less 2% a year.
That difference may not sound like much, but over a 20- or 30-year teaching career, it can mean tens or even hundreds of thousands of dollars quietly disappearing from a retirement account.
The craziest part?
When I used to visit schools, many teachers genuinely believed they were paying no fees at all.
Why?
Because that’s what they were told.
I remember one situation in a teacher’s lounge where another rep became furious because I was explaining how fees worked inside his company’s product. He literally told me I had “no business” discussing his fees with teachers.
Think about that for a second.
You’re contributing to a retirement account every paycheck, but somehow discussing the cost of the product is considered off limits?
That tells you everything you need to know about how parts of the 403(b) industry operated for years.
Even worse, teachers would often tell me:
“My rep said there are no fees.”
Meanwhile, the fees were sitting there all along, buried inside sub-account expenses, rider charges, mortality expenses, administrative fees, and surrender schedules that most people never fully understood.
Then karma showed up.
That same firm eventually paid a $50 million SEC penalty over allegations involving misleading account statements provided to investors.
According to the SEC, the company gave investors the impression that their quarterly statements showed all fees being paid. In reality, many statements frequently displayed $0.00 in fees, even though investors were in fact paying them.
Imagine opening your statement and believing you paid nothing while fees quietly chipped away at your retirement savings year after year.
This is exactly why teachers need to ask more questions.
Not:
“What’s my return?”
But:
“What am I actually paying?”
“What are the surrender charges?”
“How is this advisor compensated?”
“Can I leave this product if I want to?”
Because in the 403(b) world, the most expensive products were often sold by the people who showed up in the schools the most.
And unfortunately, many business offices never reviewed the products closely enough to protect teachers from it.
That’s the part that still bothers me most.
At Canonico Wealth Management, a partner firm of Perennis Financial Planning, I help NJ teachers review their 403(b) plans, understand hidden fees, and determine whether their retirement strategy is actually working for them.
Because retirement planning should not feel like a sales pitch hidden inside a teacher’s lounge.
If you want a second opinion on your 403(b), let’s talk.