Personal Income Benefit investment options give you the ability to turn your retirement savings into an annual withdrawal benefit. Guarantees are based on the claims paying ability of the issuer. A variable annuity is the only type of annuity that charges the M&E fee. If you’re not familiar with variable annuity products and how they work, fees can be confusing to decipher. Notes on Fee Calculations Assumes a 6% market return and a 3% inflation rate. AXA Equitable pays contribution-based and asset-based compensation to their agents. If you are like many school district employees, there is a good chance you are using a 403(b) plan as a way to supplement your pension in order to build a healthier retirement. That could mean the difference between retiring early or late. Axa pays a commission of 1.5 percent to 2 percent on every future dollar an employee contributed to a 403(b) … Buying this variable annuity or any annuity cannot give you double tax-deferral because there’s no such thing. Option, not options. The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. AXA Advisors, LLC, makes available a 403(b)(7) group custodial account program through PenServ Plan Services, Inc. (PenServ) PenServ provides recordkeeping and administration services for the 403(b)(7) group custodial account program. A 403(b) plan (also called a tax-sheltered annuity or TSA plan) is a retirement plan offered by public schools and certain 501(c)(3) tax-exempt organizations. Guarantees are based on the claims paying ability of the issuing insurance company. So, if you invested $8,000 every year then you’d lose $99,375.97 to fees (adjusted for inflation). Over 30 years the 1.75% annual fee costs you 65.37% of your real profits. No matter how simple or complex, you can ask it here. Fees to the insurance company associated with risk protection, Fees associated with the investment funds inside the contract, $6,000/ year allowed for catch-up contributions if over 50. My goal is to make my review of annuities as impartial and objective as possible. Does that mean you get to earn higher returns? Investors should consider the investment objectives, risks, charges and expenses of the variable annuity contract and sub-accounts carefully before investing. Here are some of the rider benefit fees: A fee charged to process a hardship distribution. By contrast, the average investment fees for mutual funds inside a 401(k) retirement plan cost investors 0.88%, according to a 2015 BrightScope report. That might sound good for someone who is nearing retirement and wanting to protect their nest egg. While 1.20% might not sound like that much, this fee can make a significant difference to the value of your portfolio when you retire. Yes, it could happen. There are no up-front fees, no back-end fees and some of … No match provided. A 403(b) is a retirement plan provided by employers in nonprofit organizations. I then received a letter from the school district plan administrator stating that vanguard was not an approved provider and they would not support salary reductions for the account. This annuity also gives the agent commissions based on your contributions. Statistically speaking, the chances of meeting with an untimely death when the market is down AND when you’ve lost a portion of your contributions may be relatively low. AXA is the main annuity provider at my school district. Because they levy high fees on the plan participants, the school district doesn't have to cover any of the plan expenses. The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. The percentage can be as high as 7% and never less than 2.5%.”. If you have a 403(b) plan, then you’re already getting tax-deferred growth. A fee charged to facilitate transactions between buyers and sellers. Riders are additional guarantee options that are available to an annuity or life insurance contract holder. agree to absorb all losses to the extent they exceed the protection provided by the SIO at maturity. This creates ongoing compensation for your broker. This fee comes right out of your account annually for the life of the investment, whether your investments earn money or not. My Action Steps And 403(b) Wise. But how much can you protect? However, in general, variable annuities will add at least 1% in costs just for the M&E fee alone, not to mention the fees for the variable sub-accounts and income riders that can (and often are) added on. It’s always satisfying for me to break down complicated financial products out there to try and provide some clarity on how they really work. You want to compare prices and features, and understand exactly what you’re buying. They are sold only by prospectus. Investment Options:  AXA EQUI-VEST variable annuity offers a wide range of investment options inside this contract. by krow36 » Mon Feb 13, 2017 10:12 pm, Post Many of you probably signed up with a sales rep or agent that came to visit your school. Says AXA: “The Target Date Allocation Portfolios are not guaranteed at any time, including the target date.”. Fax: (845) 981-7299 2000 A.M. Best Company, Inc. 20 Apr. A variable annuity is a type of deferred annuity, so there are two phases to your contract: the growth phase, and the income phase. Case in point: A class action lawsuit brought against Hartford Life on behalf of about 24,000 municipal employees in San Diego County and Los Angeles CA illustrates one potential outcome: The plaintiff’s lawyers asked Hartford Life during the discovery process how much in death benefits the company had paid in the 17 years that both the San Diego and Los Angeles plans had existed. PlanConnect, LLC, (PlanConnect) provides recordkeeping and administration services for the 403(b)(7) group custodial account program. by krow36 » Tue Feb 14, 2017 7:38 pm, Post This independent review will cover the following information on the AXA Equi-Vest Annuity: How will this AXA annuity product review help you? I’ll be going into the details when we get to the benefits and features section. If you own this annuity, or you’ve been pitched this by an agent/advisor and want an independent, objective review—then you’re in the right place. Find out why I suggest every teacher dump their AXA 403(b): [VIDEO REMOVED FOLLOWING PRESSURE FROM AXA’S LEGAL COUNSEL] Second, this benefit doesn’t come free. For such cases, tax deferral is not an additional benefit for the annuity.”. That’s basically every other em… E-mail:, © Securities offered though LPL Financial, member, Your Primary Source for Trusted Financial Guidance, An Independent Review of: The AXA EQUI-VEST® (Series 201) contract for employer-sponsored 403(b) retirement plans, AXA Equitable Life Insurance Company Variable Annuity Review, Separate Account Charges: 1.20 % (Mortality & Expense charge 0.95% + other expenses 0.25%), Underlying Portfolio Operating Expenses: 1.03% (average fund expense). You listened and absorbed as much as you could, but there is a chance that some of the facts were not fully understood during the sales process. You basically lose all the returns you’ve gained. (All those extra fees with no value added!) As previously noted, mutual funds may be less expensive, but do not offer the same features and benefits. Whether the higher fees make sense for you will depend on your specific needs and situation. With a variable annuity, in order to get the investment selection combined with the income options, you pay two types of fees: This is something you want to look very closely at if you are still working and making contributions to your retirement plan. My own stupidity for not checking on that before I started investing. The world of investments can be intimidating, but really it’s like any other shopping experience. AXA pays agents 1.5% to 2% commissions on every future dollar you contribute to your 403(b) annuity. If you have an annuity or other financial product you’d like to see an in-depth review on just let me know, I’d be happy to take a stab at it. I think for Vanguard's 403b you do not have access to admiral shares. Does anyone know what the AXA 403(b) fees are? (12b1). 2018. Detailed information about these fees can be found by digging through the prospectus. Vanguard direct does not use their Admiral class funds, only their Investor class, while Fidelity does use their Premier class index funds. Option, as in one. Thanks again for reading, and as always, if you have any questions or would like to have your retirement portfolio reviewed, don’t hesitate to reach out and schedule your no-obligation consultation. Teachers: Is the Death Benefit Killing Your Retirement Plan? We only have one option: variable annuities with AXA. So, then you might select a Target Date Allocation Portfolio. AXA states in the prospectus: “. If you’re looking for protection from market risk, you may select the Structured Investment Option (SIO) available within certain EQUI-VEST variable annuities. One percent is a pretty standard charge for income riders, but do you need it? AXA Equitable Life Insurance Company is the #1 provider of retirement plans for K-12 schools, serving more than 820,000 participants in over 17,000 plans. (Source: See Also: When 2% Costs Everything–How Investment Fees Cost You Your Freedom. I have a Axa 403B I would like to track in quicken. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. I added the account as an Investing/Retirement 403B and track deposits from my paycheck into it, but cannot seem to link the account online. As far as investment-specific fees go, the company states that investments in your Protected Benefit Account come with expenses that range from 0.98% to 2.46%. How about the Guaranteed Interest Option (GIO)? In this case, AXA charges its contract holders a 5% penalty on any funds withdrawn that exceed the free withdrawal amount, but the duration of this fee starts over when you make a contribution. The death benefit is often sold as a way to guarantee that even if the market goes down and your contract loses money, a death benefit would still be paid. What you may find with plans from Vanguard or Fidelity is an expectation that the district will cover some of the plan-related expenses. When your contract is annuitized, your money is converted into payouts (this being the payout phase). The internal expenses of the sub-accounts for this particular variable annuity range from 0.61% to 2.09% and average around 1.03%. They have fees and charges, including mortality and expense risk charges, administrative fees, and contract fees. But how good is the protection? AXA has entered into sub-advisory agreements with Fidelity, Goldman Sachs, Invesco, Ivy Funds, Lazard, MFS, Oppenheimer, PIMCO, Franklin Templeton and Van Eck. If you decide to contribute to your 403b account, i would find a different vendor (e.g. One thing to be aware of with this particular annuity is that the surrender charge is based on how long your contributions have been in the contract. Okay. If you have extra money to do 457 and 403b then go for it, but I'd start with Ohio 457 for each of you, fees will be lower than your current 403 be offering, hard to get any lower going forward. . Withdrawals made prior to age 59 ½ are subject to 10% IRS penalty tax and surrender charges may apply. I was leaning towards a Vanguard IRA. AXA pays agents 1.5% to 2% commissions on every future dollar you contribute to your 403(b) annuity. by Teacher88 » Tue Feb 14, 2017 9:55 am, Post Selling annuities also creates a continuing income stream for the brokers. the amount of the withdrawal charge deducted is equal to 5% of any contribution withdrawn attributable to contributions made within the current and five prior contract years, measured from the date of the withdrawal.”. These are typically 403(b)s offered by insurance companies (AXA, VALIC, MetLife, etc. The school district name was in the pull down, they accepted the application and opened the account. Variable annuities are long term, tax-deferred investment vehicles designed for retirement purposes and contain both an investment and insurance component. Investments growing tax-deferred can accumulate and compound untouched by federal, state, or local income taxes until you begin making withdrawals, which is usually after retirement. by harpgirl555 » Mon Sep 17, 2018 8:21 pm, Post by tchasteen » Sat Feb 11, 2017 12:00 pm, Post Let’s say hypothetically you’ve contributed $100,000 over a 15-year period, and the investment performance helped it grow to $150,000 over that time period. It offers Structured Investment Options (SIO) that enables you to invest for growth with some downside protection for a set period of time. Yet, over 50% of teachers are using them to save for retirement. Securities offered through LPL Financial, Member FINRA/SIPC. Some people have suggested Fidelity as an option instead. I was able to go through the vanguard/newport group 403b enrollment for my wife. 28 Railroad Ave, Suite 2B Furthermore, any investment that you purchase inside your 403(b) account can give you tax-deferred growth. Asset allocation does not ensure a profit or protect against a loss. Hopefully that continues when we actually start with them. For example, if you are contributing $1,500 a month to your retirement plan, and 10 years into your contract you want to make a small withdrawal to pay off your home, you would have to pay 5% to AXA on any contributions made during the five previous years. Overall fees including a Mortality and Expense Risk charge, Surrender Charges based on ongoing contributions, Agent commissions and compensation based on ongoing contributions, Income rider features that limit investment options for a lifetime fee, Annuitization of the contract may be required, No additional tax benefits when part of a 403(b). by krow36 » Fri Oct 18, 2019 1:19 pm, Post And that’s in addition to the fees that are charged by that product’s mutual funds that make up your sub-accounts. At least AXA engaged, letting me know that the Equi-Vest 201 variable annuity that it offers via a prospectus that runs 132 pages would cost a minimum of 1.81 percent annually in one version and possibly a fair bit more.” You have a heart attack and go into the hospital. It’s very common for people to withdraw money from their retirement plans. In this post you say you're in Ohio, if so go to. It doesn't apply to K-12 403b plans. Mutual funds typically do not charge you this fee. It’s specifically designed for education and non-profit professionals, has the flexibility to adjust as your needs change and can help you turn your salary into a more comfortable retirement. by krow36 » Tue Sep 18, 2018 12:21 pm, Post All deferred annuities provide tax-deferred growth potential, not just this one. When this investment might make sense: If you have already maxed out all your qualified retirement accounts and would like to put aside more money into a tax-deferred account, then a variable annuity might be an appropriate option. The sales agent may also tell you that these investments all benefit from tax-deferred growth. It compensates the insurance company for the risk it assumes under this particular annuity contract, and it applies to all variable investment options. The account fees are high. such guarantees.”. There is also "other expenses" of .25%. AXA may waive this fee if your account value is higher than $50,000.  A variable annuity in a 403(b) does not give you any additional tax benefits. Over time, higher fees can negatively impact your return potential. Today I’m going to break down an annuity that is issued by AXA Equitable Life Insurance Corporation. Trying to get something introduced in our district that gave people the most options and made sense financially. The fees on the current 403(b) can be drastically reduced. This is a review, not a recommendation to buy or sell a variable annuity. The 403(b) platform offers over 90 in-vestment options and 34 different money managers. This product is marketed as a solution to help supplement your retirement income needs. pensation from AXA, the lergy Advantage 403(b) Plan provider in the amount of .25% of every $100 in the plan annually. It locks in your account value at the high-water mark, which is a crediting method based on the highest level attained by the reference index over a given period of time. What’s different about this annuity is that you remain invested in the stock market even while you are taking income withdrawals, which is why you have those additional fees. Post This option gives you different investment strategies designed to adjust with you as you move through the phases of your life and become more conservative. However, think carefully about whether or not this specific variable annuity with the structure of its surrender fees, agent commissions, and income rider options would best support your retirement goals. The MSCI EAFE Index consists of the following developed country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK. In my case, the current charge is 1.15%, but it could go up to a max of 1.24%. This is a detailed post about a popular 403(b) annuity product, the AXA EQUI-VEST variable annuity. Unlike other fee-only planners, I find that some annuities may be a part of a comprehensive financial plan when used correctly. ... lator.aspx,, ... .html?_r=1,,, ... -platform/, ... =NA&d=1512,, $25 per participant per year for ongoing enrollment plus, $12 per year for recordkeeping ($3 per participant per quarter) plus, 0.50% charges on all assets (0.49% program & 0.01% other), EQ/Equity 500 Index (0.36 + 0.50 = 0.86%) -- Large caps, 80% of US stocks, EQ/Small Company Index (0.37 + 0.50 = 0.87%) -- Small caps, 14% of US stocks, EQ/MFS International Growth (0.98 + 0.50 = 1.48%) -- International stocks, expensive, EQ/Core Bond Index (0.46 + 0.50 = 0.96%) -- US bonds, EQ/Equity 500 Index (.58% + 1.20% = 1.78%) -- Large caps, 80% of US stocks, EQ/Small Company Index (.64% + 1.20% = 1.84%) -- Small caps, 14% of US stocks, Russell 200 Index, EQ/Common Stock Index Portfolio (.70% + 1.20% = 1.90%) -- 98% of the investable U.S. equity market, EQ/Mid Cap Index Portfolio (.72% + 1.20% = 1.92%) -- S&P MidCap 400 Index, EQ/Core Bond Index (0.67% + 1.20% = 1.87%) -- US bonds, EQ/Intermediate Government Bond Portfolio (0.64% + 1.20% = 1.84%) -- US Government Bonds, EQ/International Equity Index Portfolio (0.81% + 1.20% = 2.01%) -- International stocks, most expensive of the "lowest cost" options, EQ/Short Term Bond Portfolio (0.81% + 1.20% = 2.01%) --. This offers a guaranteed rate of interest and a guarantee of principal. A fee charged by an investment manager to manage an investment fund. Read our full 403(b) vs 401(k) comparisonhere. If you have a Facebook account, one of the best ways to spread this message around is by “sharing” the post by using the Facebook icon below (it’s a blue square with a white F on it). It looks like it might be teacher specific. This review will help you do that. Home » Blog » An Independent Review of: The AXA EQUI-VEST® (Series 201) contract for employer-sponsored 403(b) retirement plans. None of the third parties referenced in this communication are affiliated with Warwick Valley Financial Advisors, Private Advisor Group or LPL Financial. . Mine is a series 200. AXA has not endorsed this review in any way, nor do I receive any compensation for this review. Answer: We recommend always using a personal email address for your MPO account rather than a work email. See if anyone currently using them will print off what their contract is. The target date is the approximate date when investors plan to start withdrawing their money. Then, you do the math and realize, you’ve only paid in $100,000. The problem is I've been looking for AXA's fees for the last hour and can't find any comprehensive information on management fees. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. If you currently own this annuity: Now may be a good time to take another look and evaluate this product in light of your long term goals. The surrender fees are stupid. Investing in mutual funds involves risk, including possible loss of principal. by runner9 » Sat Feb 11, 2017 12:47 pm, Post This pdf is only for an American Dental Association plan. Read prospectuses carefully before investing. I am legally obligated to make recommendations that are in the best interest of my clients. But you’re probably already getting this benefit. There are situations when the withdrawal charge is waived—for example, if you are confined to a nursing home for more than 90 days—and they no longer apply after the completion of 12 contract years. by merdock69 » Sun Oct 20, 2019 10:03 pm, Post What is a 403(b)? If you are interested in a more detailed analysis specific to your situation, feel free to contact me. I did that for you. A 403(b) plan, which is like a 401(k) for educators and non-profit employees, can help supplement your pension or other retirement savings. This means that if you move jobs you won’t need to worry about changing your MPO log in details. want a guarantee of principal, you should consider other investment options or products that provide It enables compounding growth of your investments and can reduce the amount of tax you pay along the way. Investment advice offered through Private Advisor Group, a registered investment advisor. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. My adviser did not want to give me that information until I got tough with him. It’s a perk that comes with the plan. BENEFITS & FEATURES AS ADVERTISED BY THE AXA EQUI-VEST ANNUITY: ADDITIONAL BENEFITS AND FEATURES OF THE AXA VARIABLE ANNUITY, Ask a Question or Schedule a Consultation, North American Securities Administrators Association, clicking on the prospectus link within this article, Podcast: Bruce McNutt and Ken Ford discuss 403b’s.