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Tuesday, March 23, 2010

Never Invest with LSW

My second year teaching in L.A., a salesman came in to talk to me about options for a 403b. I had one set up, but I let him talk me into an alternate one. This was the worst financial decision I've ever made.

The investment was crap. Whatever. Bad investments are what they are, and luckily, I left LAUSD less than a year later and never put anything else into it. I figured I'd get it out at some point.

But when I started working with Dorothy (my finance consultant) a few years ago, she worked on getting a bunch of stuff consolidated and rolled into accounts that could be centrally managed. We got through everything with a bit of fax this here, sign this there, save for this one thing from LSW. They gave her the run around. She asked me to try to run it around. I tried. I failed. She tried again the following summer. We both gave up on it for a while. She reminded me of it again when I went to check in with her a year later and we tried again. Total failure. There would be a half dozen forms to fill out, then a long wait period, followed by a denial for some reason that made no sense whatsoever. After the third time, I really gave up on it, and then let the hate boil each quarter as I got their statement and decided each time whether or not I was ready to fight this fight to conclusion.

But in November, I said, "I will get this done before the end of 2009!" So I started chasing paperwork. By early December it was all turned in. Then they said they needed an additional form from Dorothy, who was taking the rollover. Sigh. So, I got that form. Then they said they needed the signature from LAUSD again. Really? Really? Okay, so I got LAUSD to send their fax again. Then I heard nothing. Then I get a letter from them saying they needed the original paperwork filled out again because there was something unchecked. GAH!!!

Okay, okay, it's 2010. I can do this. So help me, I'm going to finish this.

So, I call them up, ask EXACTLY what they need from me. I make a list. The guy on the other end says, "Or I could have it sent directly to me, and I'd have 60 days to get it to my other person to do the rollover." This sounds perfect! It kills off at least 2 forms. Let's do that! So we fill out the slightly smaller set of paperwork, get a new signature from LAUSD, get everything faxed. And wait. And wait. I finally get a check, with 20% withheld for Federal taxes. Wait, what?!?

Dorothy says to call them back and see if they can send the whole amount, or send the withholding. I call them, and they say no, I have to send them back the check, and we have to do a whole other paperwork mambo, with signatures and forms from four different folks to go back to the original plan A. The thought of sending them the money back is not acceptable. Sure, the Feds have 20% of my money, but since the rest of this is getting rolled over, I can just put it in the retirement account and I won't have made that income, and I'll get that back at the end of the year. Worst case scenario, they keep the 20%, but at least I got 80% of my money back from the evil freaks at LSW. And frankly, as long as they don't have my money, I count this a win.


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