A Florida coalition is heralding a new model retirement plan that promises teachers and other school employees in the state large savings on 403(b) tax-deferred retirement account fees.

The coalition negotiated the new retirement plan under the umbrella of the Independent Benefits Council, Tallahassee. The IBC is a not-for-profit organization founded in 2002 by the Florida School Boards Association, Florida Association of District School Superintendents, Florida Association of School Administrators and Florida Education Association.

Together, the organizations represent more than 350,000 educators and school employees statewide.

K-12 educators in Florida have been paying some of the highest fees in the nation for their 403(b)s, IBC said. Under the new model plan, school employees participating in 403(b) accounts in the state will pay annual fees ranging from 1% to 1.5% of assets, compared to current averages of 2.5% to 3%, the IBC estimates.

The plan is designed to meet new IRS requirements, effective next year, requiring school districts to provide greater oversight of their 403(b) programs. Among other requirements, districts will have to inform employees which investment providers the districts will use to invest their 403(b) contributions.

The 5 investment companies the IBC selected to participate in its model plan are AIG Retirement Services Inc., Los Angeles, part of American International Group Inc., New York; PlanMember Financial Corp., Carpentaria, Calif.; AXA-Equitable Life Insurance Co., New York, part of AXA S.A., Paris.; American Century Investments, Kansas City, Mo; and Waddell & Reed Financial Inc., Overland Park, Kan.

The 5 were selected from an initial 25 companies submitting proposals, IBC says.

All 5 signed commitments to offer the same low fees to all school employees, regardless of the size of the district that employs them. Employees in the program will have access to more than 600 diverse investment products, IBC says.

Tom Herndon, a former executive director of the Florida State Board of Administration who heads the IBC, estimates that the new model could add billions of dollars in value to state educators’ retirement savings over the course of their working lives.

Steve Banks of TSA Consulting Group, Fort Walton Beach, Fla., says 60 of Florida’s 67 K-12 districts will participate in the plan and that the others may ultimately join as well. Banks, whose company assisted in evaluating financial firms’ bids under the new model, says firms were chosen on the basis of their expense charges, investment options, participant services and other criteria.

Among other conditions, the firms agreed to guarantee their rates for at least 3 years, Banks says.