Florida TSA Program

TSA Pros and Cons

ANALYSIS OF THE 9 COMPANIES APPROVED
BY THE ORANGE COUNTY PUBLIC SCHOOLS

Each has pluses and minuses or pros and cons as follows:

AIG RETIREMENT/VALIC

PRO - Below average costs or fees

CON - Limited investment options. Heavy promotion of sale of fixed loan to insurance company contracts. AIG routinely recommends bad advice that is harmful to the customer but benefits AIG. An example is encouragement of TSA loans. The company is for sale.

AMERICAN CENTURY SERVICES

PRO - A solid company with good mutual funds at reasonably low costs.

CON - Costs are higher than some of the companies that were dropped by OCPS. No local offices or reps. No experience with FRS or DROP. All eggs in one basket with one mutual fund company.

AXA EQUITABLE

PRO - Above average investment options.

CON - AXA is a foreign owned company with headquarters in France. Their reports are sometimes stated in Euros instead of U.S. Dollars. (Example). They have higher than average expenses and fees.

GREAT AMERICAN LIFE

PRO - Excellent investment options. Below average fees and expenses. Best limited early withdrawal charges. Best fixed option available.

CON - Excellent investment options are sometimes overlooked by reps while promoting the fixed option(s).

ING RETIREMENT PLANS

PRO - Above average investment options.

CON - ING is a foreign owned company with headquarters in the Netherlands. Their reports are sometimes issued with foreign government comments and reviews. (Example) Higher than average expenses and fees.

LIFE INSURANCE COMPANY OF THE SOUTHWEST

PRO - May be an alternative to CDs.

CON - LSW is the only company with no investment options. It is a fixed loan contract with the insurance company account where the interest paid may be more or less than a CD, depending on how the stock options market performs. They pay the highest commissions to the sales reps, have the highest surrender charges, and the longest surrender charge period.

PLAN MEMBER SERVICES

PRO - Many mutual fund options.

CON - May charge as much as 5.75% up front sales load or charge plus .3% ongoing service charge plus 1% ongoing sales rep. fee for a total of over 7% in fees. PLUS ongoing fund charges. And the IBC said it would reduce costs to educators?

SECURITY BENEFIT GROUP

PRO - Excellent investment options. Below average costs and fees. Offered as either annuity or mutual fund at similar cost.

CON - Be cautious of exuberent sales reps that state that the mutual fund offers 2 or 3% lower expenses than the annuity. This is incorrect.

WADDELL & REED

PRO - Excellent Investment Options.

CON - Company pays it's reps so little on TSA business that they must sell other products such as life insurance or financial planning fees in order to make a living. All eggs in one basket with one mutual fund family.