When it comes to selecting an Optional Retirement Plan (ORP) or Tax-Deferred Account (TDA) investment product, being aware of fees and distribution restrictions can help you get the most out of your investment dollars. For your convenience, System Human Resources has done some of the research for you.
Information on vendor products, fees and restrictions is neatly summarized in two documents—the ORP/TDA Vendor Product and Fee Summary and ORP/TDA Fixed Account Annuity Product or Investment Option Distribution Restriction Summary. Both have been recently updated and are available at the System Human Resources website.
The ORP/TDA Vendor Product and Fee Summary identifies the types of products offered by vendors and the fees associated with each product. Vendors are required to report the highest fees that they charge in each product line.
If you’re unsure of the difference between a fund management fee and a custodial fee, the summary explains these as well as many other fees vendors may charge, such as front-end sales loads, policy fees, asset management fees, surrender charges and transfer fees. It also includes The Texas A&M University System’s maximum fee standards, which vendors are required to meet before offering ORP/TDA products to employees.
The ORP/TDA Fixed Account Annuity Product or Investment Option Distribution Restriction Summary is designed to help employees better understand the annuity products that vendors offer and the restrictions that each of those products carry. It notes any vendors that have restrictions on distribution amounts from fixed-interest account funds or that charge surrender fees when you receive funds from these accounts.
This summary also explains terms that can be helpful when you’re deciding whether an annuity option is the best choice for meeting your retirement goals. These include the terms 100 percent accessible, internal/external transfers, distributions, and surrender charge (rolling and non-rolling).
If you have questions about this information, contact your Human Resources office. In addition to these summaries, the System Human Resources retirement web site includes the brochures Selecting an ORP/TDA Vendor, Guidelines for ORP and TDA Transfers and Rollovers and An Investment in Your Future as well as a list of all ORP/TDA vendors, an overview of the TDA program and Texa$aver DCP plan, and links to forms associated with these plans. If you would like to see other materials added to the System Human Resources web site to assist you in retirement planning, e-mail your ideas to Sheri Meyer, retirement coordinator for System Human Resources.