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Valic (Variable Annuity Life Insurance Company) is also one of the most popular companies on my school district's approved vendor list. The problem is that the sales rep is a wolf in sheep's clothing. You want to check with your business office to see what other plans are available to you. If permitted, you may want to establish a 403b(7) account with Vanguard. Any money you convert from Valic will be subject to a 5% surrender charge, if that money is converted within 15 years of signing the annuity contract. This comes straight from the Valic prospectus regarding variable annuities. One option is to leave the money with Valic and start contributing to another plan.

I too was suckered into a variable annuity with this company. Luckily, I only contributed $1,000 before I realized what a bum deal the annuity was. As it is, my district's 403b plans are not very favorable and I have decided not to participate in one. Check out TMF Pixy's post #11725 for a great overview of variable annuities.

Keep posting if you have more questions.
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