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Subject:  Re: Just when things were going ok, the rules ch Date:  1/4/2009  1:29 AM
Author:  FIgirl Number:  65033 of 88494

One quibble: a 403(B)7 consists solely of mutual funds, TSA -an older term for 403(B) directly referrs to Annuities(Tax Sheltered Annuities). It sounds like your 403(B) account with TIAA-CREF includes both.

Other Insurance companies(Annuity providers) usually charge much higher fees for their Annuities than the mutual funds charge for for 403(B)7 s. Also, I do not believe that Vanguard directly provides 403(B)7's to schools. You would probably be dealing through a third party middleman. Still, you would get good funds and a better deal than the other annuities. However, other 403(B)7's may or may not offer better values.

The name TSA is misleading in this case - it's a holdover from the bad old days when non-profit employees (teachers, etc) were only allowed to invest in annuities. The name has stuck around even when the 403(b)7 it's attached to allows both annuities and mutual funds. Also, Vanguard does provide 403(b)7's directly to schools and other plans, and as far as I know they only provide direct mutual fund investment - no annuity wrappers.

To the OP -- if your plan has made an agreement with Vanguard, go with it and happily. The funds are less expensive than TIAA and the firm is run with as much or more integrity. Vanguard does not have a guaranteed account like TIAA does, but in all other aspects it is comparable or superior.

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