YOU HAVE FOUND OUR OLD WEB SITE. BE SURE TO CHECK OUT OUR NEW AND IMPROVED SITE!     Attorney Says Texas TRS Succumbed to Lobbyists Teacher advocate criticizes proposed changes to 403(b) investment regulations.     Wade Caldwell, an attorney with Martin, Drought & Torres, Inc. (MD&T) in San Antonio, TX, who represents teachers in numerous lawsuits against insurance companies selling 403(b) annuities and life insurance, has harshly criticized proposed changes to Teacher Retirement System of Texas (TRS) regulations.   Caldwell has filed and settled several well-known suits against insurance companies selling 403(b) annuities and life insurance to teachers. The suits were filed because of a 1986 Texas law that prevented school districts from screening vendors who sell 403(b) products - which are retirement plans similar to 401(k) plans in which teachers set aside pretax money through payroll deductions for retirement. The result of the law was a wide-open marketplace where high commissioned products and questionable sales tactics were common.   Largely as a result of the MD&T suits, in 2001 the Texas Legislature passed SB 273, of which MD&T helped gain passage. The law places TRS in charge of approving products and vendors who can sell to K-12 teachers in Texas. Initially, TRS staff proposed regulations to SB 273 that were strongly in favor of low cost and no load vendors for the choices available to teachers; however, at a public hearing in Austin in January 2002, insurance lobbyists complained bitterly about the regulations, because the caps on fees and expenses were too low.   As a result, on February 25, 2002, the TRS staff proposed changes to the regulations which dramatically increase the amount of fees and costs which can be charged on approved products, meaning that teachers will be susceptible to losing much more of their retirement money to high cost and high fee products.   "The initial regulations were excellent. However, these changes are a patent cave-in to insurance lobbyists — especially in the area of variable annuities, which should not be sold in 403(b) plans at all. The expense caps now allow even the highest cost variable annuities to be sold to unsuspecting teachers," Caldwell stated.   MD&T has been active in representing teachers and other consumers on insurance products and has an online newsletter explaining what to look for in all types of insurance products.   For more information, please contact MD&T at (210) 220-1323 or visit their website at www.mdandt.com. A side-by-side comparison of the changes to the proposed TRS regulations can be found at www.trs.state.tx.us.     Home | Disclaimer | © 2002 403(b)wise. All rights reserved.