What fees and expenses are charged for participation in a tax-sheltered annuity program?
Investment Company fees. These fees depend on the company and the type of investment you select. Some tax-sheltered annuity investment companies have no direct fees. • Annual fees. Each tax-sheltered annuity company is permitted to charge an annual fee of up to $30 per participant. Most insurance companies have waived this fee. • Insurance company charges. If you purchase a tax-sheltered annuity from an insurance company, you may pay a surrender charge of up to 8% if you withdraw your funds during the first eight years of the contract, or transfer them to a different company. You may also pay a mortality and expense (M&E) charge on variable annuity accounts. Most of this charge is agent compensation. Generally, you will pay about a 1% fee for this. • Redemption fees. Certain specialized funds charge a redemption fee for withdrawal or transfer before a specified period (90 to 365 days or more) has elapsed.
