FAQ – Mutual Fund Investing

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Can I switch within the Oppenheimer family or even other approved sources within my school district? Will I pay a commission for every move I make? Can I invest with no commission?

Your district’s plan determines whether exchanges of annuity contracts or custodial accounts are permitted. If they are, they may only be made between 403(b) vendors on the district’s approved list. Your employer can tell you which vendors are permitted to receive an exchange. Some districts limit the number of changes permitted each year.

If you are thinking of switching out of an annuity contract, it’s important to consider any surrender charges that may apply. Many annuities have surrender charges that decrease gradually over a period of five to 15 years, with the charge corresponding to the number of years the penalty lasts. If you move your money before the period expires, you’ll owe a surrender charge. Typically, these charges decrease by 1% per year. For example, an annuity may have a 7% surrender charge that decreases 1% per year until it disappears after seven years. Be aware that some vendors impose rolling surrender charges. This means each new contribution is locked into a new surrender charge period.

Loads, or sales charges, vary depending on the vendor and investment you choose. Loads are similar to a commission and may be paid when you purchase (front-end load) or redeem (back-end load) shares in a mutual fund. Your vendor can answer questions about commissions. To find contact information for your vendor, Browse Vendors at 403bCompare.com.

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