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cguinta1

Axa 403(B) Transfer Questions

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A few questions for anyone who knows a fair amount on 403(b) plans.

 

I work in a public school in New Jersey. About three years ago the district discontinued Vanguard as a 403(b) vendor for all staff. We were left with the usual annuity/insurance companies such as AXA, MetLife, Valic etc. Needless to say, after Vanguard left I enrolled with AXA and have saved about $20,000.00 with them. Recently, Vanguard was brought back to the district as a potential vendor. I will begin contributions to my Vanguard 403(b) account immediately.

 

My question(s) is will AXA allow me to transfer the money I have with them back to my Vanguard 403(b) account? If so, does anyone know the penalties for transferring money in an AXA 403(b) to another vendor? If anyone has any experience with this please let me know. I began researching potential fees and penalties I would pay for transferring my money out of AXA. One chart I found state that it is a 12 year process. I am copying exactly what it said below.

 

12-year non-rolling if transfer to other vendors only: 1st - 5th year - 6%; 6th - 8th - 5%; 9th - 4%; 10th - 3%; 11th - 2%; 12th - 1%; 13th and beyond - 0%.
These charges waived if separate from service, if age 59 1/2, or if age 55 with 5 years in plan; for death or disability. Able to move 10% per year without charge.

 

Is this chart accurate? Does this mean it would take over 12 years to transfer my $20,000.00 from AXA to Vanguard paying a penalty every single year?

 

Are there any other options outside of this 12 year penalty plan?

 

I greatly appreciate any insight the posters on here can give.

Thank you,

Chris

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We just moved my wife's AXA 403B to Vanguard in NJ but it was under different circumstances. There were no charges being that we had the account over 13 years, she was over 59.5 and she was retired. So we met 3 requirements for no withdrawal fees. Anyway, I believe what the chart you are looking at means is that if you withdraw anytime during the first 5 years it will cost you 6%. Years 6 through 8 - 5% and so on. If you been there 4 years and you withdraw the full 20,000 it would cost:20,000 - 2,000 (free withdrawal amount) = 18,000 * 6% = 1080. This example assumes all 20,000 is contributions. If there is some investment performance in the 20,000 you can subtract that first. Then depending on what series contract you have this could vary a little. Also ceratin funds have some rules of their own. To get accurate information I would give the AXA customer service center (1-800-628-6673) a call. I found them very helpful and knowledgeable, unlike your rep who just wants to keep you in the plan and sell more.

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We just moved my wife's AXA 403B to Vanguard in NJ but it was under different circumstances. There were no charges being that we had the account over 13 years, she was over 59.5 and she was retired. So we met 3 requirements for no withdrawal fees. Anyway, I believe what the chart you are looking at means is that if you withdraw anytime during the first 5 years it will cost you 6%. Years 6 through 8 - 5% and so on. If you been there 4 years and you withdraw the full 20,000 it would cost:20,000 - 2,000 (free withdrawal amount) = 18,000 * 6% = 1080. This example assumes all 20,000 is contributions. If there is some investment performance in the 20,000 you can subtract that first. Then depending on what series contract you have this could vary a little. Also ceratin funds have some rules of their own. To get accurate information I would give the AXA customer service center (1-800-628-6673) a call. I found them very helpful and knowledgeable, unlike your rep who just wants to keep you in the plan and sell more.

 

 

Thank you very much for the clarification mpnret. I will give AXA a call and see what they say. I emailed and called my AXA adviser about a week ago and I am still waiting on him to answer my questions about possible penalties.

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We just moved my wife's AXA 403B to Vanguard in NJ but it was under different circumstances. There were no charges being that we had the account over 13 years, she was over 59.5 and she was retired. So we met 3 requirements for no withdrawal fees. Anyway, I believe what the chart you are looking at means is that if you withdraw anytime during the first 5 years it will cost you 6%. Years 6 through 8 - 5% and so on. If you been there 4 years and you withdraw the full 20,000 it would cost:20,000 - 2,000 (free withdrawal amount) = 18,000 * 6% = 1080. This example assumes all 20,000 is contributions. If there is some investment performance in the 20,000 you can subtract that first. Then depending on what series contract you have this could vary a little. Also ceratin funds have some rules of their own. To get accurate information I would give the AXA customer service center (1-800-628-6673) a call. I found them very helpful and knowledgeable, unlike your rep who just wants to keep you in the plan and sell more.

 

 

Thank you very much for the clarification mpnret. I will give AXA a call and see what they say. I emailed and called my AXA adviser about a week ago and I am still waiting on him to answer my questions about possible penalties.

 

 

Mpr I went back and looked through everything. The total amount I contributed to the 403b the last 2.5 years has been $17,400.00. The account is a little over $20,000.00 now. When I do transfer the money from AXA to Vanguard do I subtract the 6% from my 17k contribution or the 20k the account is worth now?

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Mpr I went back and looked through everything. The total amount I contributed to the 403b the last 2.5 years has been $17,400.00. The account is a little over $20,000.00 now. When I do transfer the money from AXA to Vanguard do I subtract the 6% from my 17k contribution or the 20k the account is worth now?

 

 

You will get your total account value (20K) minus any withdrawal fees. The way they calculate withdrawal fees is complicated but worse case it should be 17K(contributions) *6% = 1020. The reason I say it is complicated is they have different tweaks depending on the contract series you have. Also they claim you have 10% of total account value free withdrawal amount. However, later on they state "For purpose of calculating the withdrawal charge, amounts withdrawn up to the free withdrawal amount are not considered a withdrawal of any contribution". So that statement would lead you to believe that your 2k free withdrawal amount will not reduce your contribution amount of 17k for withdrawal fee calculation. I am sure the customer support center will know the correct answers. Good luck and be sure and report back with the final figures so that it may help others.

Mike

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Guest Joel L Frank

This entire thread should be sent to the following members of the New Jersey State Investment Council:

 

ROBERT GRADY, CHM.

JAMES L. JOYNER

TIMOTHY MC GUCKIN

MARTY BARRETT

PETER MAUREN

 

Their address is: New Jersey Division of Investment

State Investment Council

PO Box 290

Trenton, NJ 08625-0290

 

ASK THESE INDIVIDUALS IF THEY HAVE ANY RELATIVES/PERSONAL FRIENDS THAT ARE VICTIMIZED BY BUYING COMMISSION-BASED INVESTMENTS EVERY PAY DAY?

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This entire thread should be sent to the following members of the New Jersey State Investment Council:

 

ROBERT GRADY, CHM.

JAMES L. JOYNER

TIMOTHY MC GUCKIN

MARTY BARRETT

PETER MAUREN

 

Their address is: New Jersey Division of Investment

State Investment Council

PO Box 290

Trenton, NJ 08625-0290

 

ASK THESE INDIVIDUALS IF THEY HAVE ANY RELATIVES/PERSONAL FRIENDS THAT ARE VICTIMIZED BY BUYING COMMISSION-BASED INVESTMENTS EVERY PAY DAY?

 

 

 

Update: I spoke with AXA. There will be a 6% penalty for withdrawing my funds and transferring them to Vanguard. In my opinion, its worth it and I have already filled out the paperwork to do so.

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