What Are Surrender Fees?
Experts from Groom Law Group and Cammack Retirement Group answer questions concerning retirement plan administration and regulations.
Reported by
“
I work for a health care provider that maintains a 403(b) plan. I was recently informed that one of our legacy providers charges something called a ‘surrender fee.’ Can you explain what this is?”
Charles Filips, Kimberly Boberg, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, vice president, Retirement Plan Services, Cammack Retirement Group, answer:
A surrender fee is a charge for transferring your assets out of an investment, generally an annuity contract (i.e. “surrendering your assets”), before a set time period specified under the contract. Surrender fees are not unique to 403(b) plans, as such fees apply to some, but not all, annuity contract investments in other types of retirement plans.
Self Employed Ministers’ 403(b) Contributions’ Effect on Compensation
Experts from Groom Law Group and Cammack Retirement Group answer questions concerning retirement plan administration and regulations.
Reported by
“
We are a church denominational 403(b)(9) plan which has not elected to be covered by the Employee Retirement Income Security Act (ERISA). Our participants include self-employed ministers. In Publication 571,
Tax-Sheltered Annuity Plans (403(b) Plans), the IRS instructs self-employed ministers that their includible compensation is net earnings from ministry minus contributions made to the retirement plan and the deductible portion of their self-employment tax. If the minister makes designated Roth or after-tax contributions to their 403(b) account do those contributions reduce includible compensation since these contributions do not reduce taxable income?”