Are luring our nations veterans away from government retirement plans putting them into broker operated iras that carry higher fees. Rich edson on the story hes been following and working on for several days. Reporter cheryl, it begins with a striking statistic. Within the first year of leaving government jobs, Officials Say 45 of federal employees transfer out all the money they have in government retirement investment accounts striking because the federal Retirement Savings plan is known as incredible value. Government guarantees the investment in government securities and fees are much lower than private competitors, that has analysts asking why nearly half the federal workers leaving jobs are passing on such a solid investment deal . Former Government Employee and director of government Pension Center john turner says private investment firms are luring veteran retirees away from Government Funds which he says is a bad idea. You would be paying a lot more in fees, and then you would be giving up really good index investments. Reporter turner says he called about a dozen firms pretending to be interested to moving money out of Government Fund. The answers varied trying to push into funds with higher fees. Cheryl im sure theyre refuting some of there turners accusations . The Banking Industry says turner acknowledges that Investment Companies are often selling different product, many of the funds have managers buying and selling stocks with the goal of higher returns, others have a broader menu of Investment Funds and investors have to pay for that, thats why fees are higher. And the president of the Financial Services roundtable, a Banking Group in washington says they should steer investors to higher fee funds if theyre getting funds the government just cant offer. It wouldnt be wise to offer the same fund for same or similar fund higher cost and lower performing. If thats whats happening, thats worthy of inquiry and review. A lot of the time theres more to the story, its not apples to apples. Reporter he called about a dozen different funds asking for information. As for the thrift savings plan, Officials Say they are trying to figure out why all this money is leaving their fund . Theyre going to have a survey to figure out why retirees are leaving funds to go elsewhere. Cheryl 324 Million Dollars last year. Thats a great story. Thank you. All of you heard richs report, and next guest says just because a plan is low cost doesnt mean its the best plan. With me now is david frost with frost and frost management. You say the Investment Advisers are in the right in the promises theyre making to the veterans and getting them out of federal plan . No. What i am saying is there may be a reason why it may be in the clients best interest to move it. Depends what the goal is. The advantage is for the thrift savings plan, extremely low cost funds that are tied to indexes. Thats really good. However, in certain cases, people need more than investment, they need investment advice, and thats not something that is available through the government savings plan. Cheryl im sorry, if you look at thrift savings plan and the fees on it compared to what im going to pay or veterans pay whether it be bank of america or morgan stanley. The average fee 29 cents per thousand dollars invested. If im investing a thousand bucks with Investment Advisers, im paying 2 minimum. How can anyone guarantee me im going to make more money . There would never be a guarantee they would do better. Cheryl you are overselling it to the folks. Its misrepresented if thats the case. Whats the goal of the person that might be considering moving the money out . So its certainly just because something is less cost does not make it better. Think about a yugo was a lot less expensive than a buick but it didnt make it better. Not that im comparing a yugo to a savings plan. Have you three index funds that track equities, one that tracks bonds, one that tracks government. Cheryl they arent going to sell the etfs and the index funds, its not just federal workers and veterans that have complained. Employees from at t, hewlettpackard, ups have lodged complaints against Investment Advisers for overpromising them with what theyre going to do with money, how theyre going to invest their money. This isnt just happening to federal workers and mr. Turners investigation found he was appalled at what these federal workers in particular the veterans are promised. He has every right to be. Once again thats shame on the Investment Adviser making promises he shouldnt make, especially if theyre convincing them to pull out of those to go into index funds which they already had available or go into a bank cd. Most Investment Advisers going against mr. Turners article or research are looking into whats in the best interest of the client. They have a fiduciary responsibility to look at clients goals and objectives. Most of my clients could live on retirement. Cheryl there are solid good Investment Advisers out there. Im not saying you are doing things that are unfair to federal workers, theres going to be that potentially 20 . 45 of federal workers are pulling money out of thrift plan. A good example. I have a client we took on that had 500,000 sitting in the government savings plan there for five years. The market is up over 200 in the last five years. She sat there for five years because she was not sophisticated. Had no idea what the Investment Options how they pertain to her. She sat on the sidelines. What did it cost to have no exposure over the last five years . With a little investment advice, she could have done much, much better. Cheryl the thrift savings plan, there is no guidance on the government side at small. No there isnt. There are five lifestyle funds what they call them and say im going to retire in this block of years, and then they can be in a fund thats managed that way. They dont get access to the thrift savings plan and people need someone to talk to about future, major purchases, many other things Investment Advisers do beside pick a fund, equity, stock or bond. Cheryl at the same time, and certainly buyer beware. There isnt anybody investing in the stock market or bonds or cash or whatever youre doing, at the same time, though, there is there are federal authorities looking into this . As they should. If anything is misrepresented, they should be gone after. Im glad that the government is looking into it. Once again, im not saying there is anything wrong with the tsp. There is great Investment Options available in there. Theres both sides of it that someone may actually need an adviser. Cheryl youre saying that from Investment Advisers perspective. A lot of times, this is the way of the world, there are people that are less than honest that are going to go after the federal workers, these veterans, these heroes coming home from iraq and afghanistan who have the solid pensions. Companies that own franchises, its the same thing, theyre trying to take advantage of them. My heart goes out to them if theyre targeted are in reason. Absolutely. In his report he showed there were banks offers a 200 bonus if they moved their money. That is ridiculous. Into a fixed cd . When the Government Fund is guaranteed not to lose value. You have to see what are you comparing it against . Are you comparing it against a welldiversified portfolio . Look, there are over 60,000 different Funds Available in the United States. We cant say the ten funds that are available within the tsp are the best funds in the world. They certainly may be cheaper, that doesnt make them better. Cheryl 29 cents for a thousand dollar investment. That is a good deal, and fees can be incredibly high for those that dont anyone better. Thats why were doing the story. Thank you very much. I appreciate you joining me on the willis report. Absolutely. Cheryl now to another type of plan that tonight is facing a major roadblock. The u. S. Postal service wants to streamline operations after posting a 1. 6 billion dollar loss. Standing in the way . Congress. Half of the senate signed a letter attempting to halt uspss idea to become solvent again. First and foremost, we should say that the u. S. Postal service not taxpayerfunded but yet congress has authority. Ageold question. Should they . Thats a great question. We can imagine a future where the Postal Service gets to modernize and move on and become a business thats doing its own thing, serving consumers on its own, delivers the mail and doing potentially other things. For now the question is as a government agency, are we going let this modernize and become a 21st century government agency, or hold onto an oldfashioned government. Cheryl let me ask you something, what in the world do the senators have, what is it their business what is a this is a corporate turnaround, were talking about 15,000 jobs theyre proposing to cut. This is an organization that employees 600,000. Wouldnt it be better to stay solvent, turn a profit. Get the senators out of here, congressman and senators out of here. Wouldnt it be better to have the job loss cuts to save the agency oversmall. That remember is sounds better. I dont know the details of the Postal Services operations. Cheryl theyre losing, they lost, lets show viewers, 1. 96 billion dollars they lost in the third quarter. Go ahead. They need to be given the opportunity by congress who is essentially their board. They belong to the taxpayers, congress is our representatives. Congress needs to give them enough room, give management enough room to try some changes, to try to make it work. And they might fail. This might not work, im not guaranteeing this particular plan, these cuts are going to save the Postal Service. I can guarantee you doing nothing will doom the Postal Service. Cheryl obviously, this is not a shock to anyone watching tonight that they are, of course, losing volume. If you look at the chart for firstclass mail volume down, down, down, all about email, all about the internet and when it comes to packaging, the u. S. Postal Service History has taught us was not made to send packages, it was made for letters back in the day when the u. S. Postal service was created. 21st century or not, dont they need to redo the entire group . Absolutely. The reason theyre in letters is that they have a monopoly. Nobody sells allowed to deliver letters. They do well on packages but only 8 of the Package Delivery industry. Government should remove the monopoly protection. Weve seen this in other Industries Like uber with cabs. When competition comes in, it can force the oldfashioned incumbent to be better for them in the long run. Cheryl speaking of washington and money and, of course, that is what were covering on this network. They raised credit limit of 15 billion dollars with the treasury in 2012, and at the same time, december of 2012, they proposed to make cuts, the Postal Service did, and guess who stood in the way . Congress . Congress said, look, hold off. Were going to address your issues, it never went to a vote in d. C. , ever. Congress doesnt have solutions, there is no debate of one solution over another. This is a debate of try to change, try to adapt or do nothing. And congress sadly half of the senate seems to be on the firmly do nothing side. Thats sad. Cheryl midterm elections, leave it there. Thank you very much. Appreciate it. Thank you. Cheryl want to hear from all of you, what do you think . Heres our question log onto gerriwillis. Com, vote on the righthand side of the screen, ill share the results at the end of the show. During the show, want to you facebook us or tweet me, of course im in for gerri tonight. You can send an email to gerriwillis. Com, at the bottom of the hour ill read the tweets and emails. Is a cell phone plan price war on the horizon . The latest on important announcement from sprints new ceo and what it can mean to wireless customers across the country . Im jane and i have copd. Im dave and i have copd. Im kate and i have copd, but i dont want my breathing problems to get in the way my volunteering. Thats why i asked my doctor about breo. Oncedaily breo ellipta helps increase airflow from the lungs for a full 24 hours. And breo helps reduce symptom flareups that last several days and require oral steroids, antibiotics, or hospital stay. Breo is not for asthma. 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So now weve turned her toffee into a business. My goal was to take an idea and make it happen. Im janet long and i formed my Toffee Company through legalzoom. I never really thought i would make money doing what i love. We created legalzoom to help people start their business and launch their dreams. Go to legalzoom. Com today and make your business dream a reality. At legalzoom. Com we put the law on your side. Gerri sprint is about to launch an aggressive new cell phone pricing plan next week. The wall street journal says the new low priced mobile plan will cost 50 for unlimited talk, text and data. This could undercut sprints competition. Do you think this is going to be a fullblown win for consumers . Bad for them . Its a pretty impressive offering if theyre doing 50 for unlimited text, talk and data. The closest is 20 to 30 more from the competition. You have to take into account this is sprint, and their network isnt highly rated in the first place. Cheryl i want to show toil straight your point, that the Third Largest mobile Carrier Company by users, but when it comes to how theyre rated, theyre last. Dead last, i know in pc mags mobile networks, dead last on customer appreciation, on the last Consumer Reports rankings and losing subscribers quarter after quarter, so this is clearly an attempt to win back some people and, you know, get them on the path to more stability, you know, whether or not it works. The bottom line, if can you save a few bucks on wireless bill every month, its not bad. Cheryl i want to give viewers a sense whats happening. In chicago they tested out 50 bucks unlimited. In portland, four phone numbers, 160 a month. Tmobile, this is john ledger who says hes the end carrier and all the bravado and everything. 50 bucks with one gigabyte of data. Is that enough from a technology standpoint . Were all on our phones and doing ten things on the phone. In this day and age, no, ten years ago, a gig is enough for most people. With the way the apps are with the continuous connections you have on various things, ive found my mobile data crept up and up over the years, still happening. I think two gigs for anyone who leads any active online lifestyle is a minimum. Cheryl lets talk about this, pc magrated sprint last in america quality. If they roll out this deal next week, the journal says theyre going to, wouldnt that overload the network. Do they have the capacity to handle . It depends what city you are, in a lot of them vary by location, the quality what theyve put out there. So will it be able to handle it . Probably wouldnt be worse than it is now, but certainly theyre doing their best to reinforce their network and turn the unused spectrum into an offering. So i think the general i think you cant think its going to change much either way in the coming months, regardless what they do. Network reinforcement takes time, and so its about bottom line the money thing and can you standoc a network that might not be as strong. Cheryl price war, yes or no . Yes, huge price war set off by john ledger and tmobile. Hes done impressive things but the other ones are following suit and hitting back. Cheryl he says hes the disruptor and he is. Hes done very well, and theyve gained subscribers, its working. Power to him. Cheryl pete, thank you very much. Coming up later in the show, as long as it doesnt rain on me, were going to be cooking outside with recipes that can help you shed pounds as we head into the fall. And speaking of fall, will a cold summer lead into a cold autumn and colder winter . And what would all of that do for the economy . You should hear the weather predictions we were getting today. Brace yourself. So i can reach ally bank 24 7, but there are no branches . 24 7 its just im a little reluctant to try new things. Whats wrong with trying new things . 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