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achie25

Transfer 403b From Axa. Need Advice.

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I am a teacher in Michigan. I currently have approx $16k in a variable annuity with AXA. I am looking to do a 90-24 and transfer out to another provider. My district approved providers are as follows:

 

AXA Equitable

VALIC

Primerica Financial

Capital Guardian Bank

Edward Jones

Mass Mutal

Paradigm Equities

Painwebber

Morgan Stanely Dean Witter

GLP Associates

 

About 5 of these providers deal primarily with American Funds.

 

My surrender fee from AXA is approx. $700.

 

I have contaced a few of these providers and am not overly impressed. However, I do have a possible better situation with Morgan Stanely. A guy I played college football with is an advisor with Morgan Stanely. He said that if I switch to them he will waive the $75 yearly account fee that they charge for as long as I stay with them. He said the only thing I would have to pay is the funds ER and loads (if applicable). So I am proabably going with them if that is the case. Is that Kosher?

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Do you have the district plans for each of the companies? You should be able to see the list of funds available for each company's plan. For example, Morgan Stanley will probably have a specific plan documented in a booklet format for employees of that specific district. Compare the funds with the lowest ER and less fees.

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Do you have the district plans for each of the companies? You should be able to see the list of funds available for each company's plan. For example, Morgan Stanley will probably have a specific plan documented in a booklet format for employees of that specific district. Compare the funds with the lowest ER and less fees.

 

 

I don't have that information. I was lead to believe that I could go any route I wanted once with another provider like Morgan Stanely.

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When executing a 90-24 transfer, can't you transfer the money anywhere? Even to companies not on your "list of approved providers." ????

 

Am I wrong on that?

 

 

 

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I doubt you can go any route. This is negotiated between your union, district, and MS. Also, in response to being able to invest outside your list, I believe law allows to invest anywhere but you will not get the company match. The idea is to take advantage of the match and that would require going with the qualified vendor list. Your plan descriptions should be available through your HR or the company you are researching. We went through these steps by calling the company we were planning to contribute to. Morgan Stanley will have your employer in their system and should be able to send you the exact plan associated with that employer which was negotiated. In this plan, the funds available to choose from should be included. You can then use morningstar to find any information that is absent in their literature, i.e. ER and history.

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I doubt you can go any route. This is negotiated between your union, district, and MS. Also, in response to being able to invest outside your list, I believe law allows to invest anywhere but you will not get the company match. The idea is to take advantage of the match and that would require going with the qualified vendor list. Your plan descriptions should be available through your HR or the company you are researching. We went through these steps by calling the company we were planning to contribute to. Morgan Stanley will have your employer in their system and should be able to send you the exact plan associated with that employer which was negotiated. In this plan, the funds available to choose from should be included. You can then use morningstar to find any information that is absent in their literature, i.e. ER and history.

 

 

I will check tomorrow at Central Office about whether or not Morgan Stanley is limited to what funds they can offer me. My friend at Morgan Stanley is telling me that I am not limited to specific funds. I will double check for sure.

 

Unfortunately I do not get a match in our school district.

 

 

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What school district are you in? Morgan Stanley does not work with many of the Metro-Detroit districts I am aware of, and the ones that they do most certainly limit the fund exposure.

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If you don't get a match, then I don't see the point in using any of the school's crappy vendor options other than providing a service for employees and has something to do with salary reduction agreements. In that case, big woop. Check the laws and regulations on your investment options. Call Vanguard and talk to their retirement specialists.

Do you really need a 403B? What about a regular IRA through Vanguard? Can someone else jump in and explain what the benefit of a 403B is if there is no match?

 

BTW, I know you mentioned you have a friend with Morgan Stanley and you might feel obligated to give him the opportunity for some business since you've already discussed some things with him. My advice to you is not to get sensitive to others when it comes to your income. Remove yourself from any relationship. I have a dozen friends that sell insurance, mortgages, and financial advise. I have not used any of them unless it makes sense. Salesman are salesman even if they are friends.

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Do you really need a 403B? What about a regular IRA through Vanguard? Can someone else jump in and explain what the benefit of a 403B is if there is no match?

 

 

Allowable contributions are about $10-15,000 more (depending on age)

403b can be accessed before 59 1/2.

Loan possibilities are different.

 

I'll stop there.

 

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Yeah - the max. contribution limit is MUCH higher with the 403b. Also, you are taking it out of your salary pretax, which can be an advantage as well. I would second the advice about looking into the 90-24 transfer outside of your vendor list. If there are no limits as to where your transfer goes - look into no load/low fee vendors like Vanguard, TRP and Fidelity (for example). No sense in paying a surrender charge to get out of an annuity and then turn right around and pay a front end load to invest the transferred funds.

 

As far as future investment - if you are limited by your 403b vendor list as to how you can invest ongoing contributions, I think the idea of using an IRA to start with is good. Get the first $4000 invested in an IRA with a fund family of your own choosing, then, once you have limited the IRA, see what your best options are through your 403b list for additional contributions.

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