Guaranteed annuities apply to every participant identically in 401k and 403b plans. The group annuity arrangement requires daily recordkeeping of accounts at the participant level. Administrative fees and expenses are assessed on two levels within the group annuity (plus itemized expenses that may be charged directly to the plan).
There are investment management fees assessed against the individual mutual funds and general account investments within the annuity wrap. In addition, there is a wrap fee assessed against the total assets in the annuity.
It really amazes me that in this day and age of expense control that employers continue to offer these insurance company retirement plans. An annuity within a 401k or 403b where you then choose the sub-account mutual funds within it? Give me a break. Redundant and too expense - easily doubling the cost to the participant, unless the employer is picking up the tab. Yeah, right?
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.