I used some of my 403(b) annuity to buy service years. One company charged me the full surrender value despite the fact that it went directly into CTA. How can I contest this?
In some cases, it may be to your benefit to use part of your 403(b) annuity to purchase additional service years. You can read more about it here. However, be aware that:
- Whenever you purchase additional service years, the money rolled over from the 403(b) annuity goes into the separate CalSTRS or CalPERS pension plan to which you belong. CTA has nothing to do with calculating your CalSTRS or CalPERS service years, and no money used to purchase service years goes to CTA.
- Most annuities have surrender fees if you surrender the policy prior to the end of the surrender period. These fees are generally charged regardless of the reason you surrendered the policy, so you do not get any kind of break from surrender fees for using the annuity to buy service years. The surrender fee goes to the insurance company issuing the annuity.
In the future, before you consider surrendering all or part of an annuity to purchase service years, visit CalSTRS for more information, or call 800-228-5453 for a telephone interview if you are a CalSTRS member. If you are a CalPERS member, you may be able to purchase service credit with a 403(b) rollover, but the same conditions apply. Learn more at CalPERS or call the Customer Contact Center at 888-225-7377.
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