Page 2B-3

 

Even after your employment with Butterfield University terminated, you are not required to roll your retirement plan to an IRA. The existing plan contains a diverse line up of investment options that have been competitively priced and contains features designed to benefit the employee, both current and former, of Butterfield University. Before you consider rolling your funds to an IRA ask whether:

  • Are you aware of the many benefits and features offered in your current plan?
  • Have you inquired with your current investment provider about investment options that may carry similar or lower cost products without limiting access to your money in retirement?
  • Have you examined the fees and expenses of the product you are considering rolling your retirement savings to?
  • Have you received a prospectus of the proposed product?
  • With the investments offered in your IRS:
    • Will you incur new surrender fees?
    • Will the new product result in an increase in fees and expenses?
    • Do you understand how the proposed product works?
  • Are you considering rolling your money to a variable or fixed annuity?
    • Understand there’s no additional tax benefit to rolling over your funds to a variable or fixed annuity. IRA’s are tax deferred.
    • Give careful consideration to the use of Guaranteed Minimum Withdrawal Benefits and/or Guaranteed Living Benefits and/or Guaranteed Minimum Income Benefits. While these benefits may be appealing, they increase the cost of the investment which is already typically higher in cost.
    • Fixed annuities may have no fees and yield a guaranteed rate of interest. The insurance company bears the risk and pays you a stated rate of interest. Additionally, fixed annuities may carry an additional surrender charge, limiting access to your funds in retirement.
    • Index annuities are complex instruments and are not regulated by the SEC. They are considered insurance products and their return is based on the performance of a stated market index. The performance of the index is limited by the index annuities participation rate, cap rate and whether or not the return is inclusive of dividends. While appealing, these instruments can perform poorly, even in a good market. These products also carry additional surrender charges that should be carefully considered.

Are you working with a Financial Advisor?

  • Have you reviewed your advisor on FINRA BrokerCheck?
  • Do you understand how and how much you advisor is being paid to work with you? Advisors have various compensation structures and these compensation structures are important to understand. They can dictate the nature of your working relationship post this and/or other financial transactions.
  • Is your Financial Advisor limited to the sale of proprietary products? Proprietary Annuities? Proprietary Mutual Funds?
  • Does the income, commissions, fees generated from this transaction contribute directly or indirectly to a sales conferences and/or contests?
  • What is the credit rating of your current provider and provider you are considering doing business with?

The Butterfield University Retirement Plan has been negotiated for fees and expenses and other important features. As a number of plan variables continue to improve, your account will directly benefit by a further reduction in fees. Additionally, the plan and its underlying investment options are closely monitored for a number of factors inclusive of performance, investment manager turnover, fund style drift and other factors that may have a potentially negative impact on fund performance.

 

 

Speak to a Registered Principal for More Help