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Did you know that certain fees may apply when you transfer your State of Connecticut Deferred Compensation Plan account from one investment option to another? This edition of "Getting There" explains how contingent deferred sales charges work and what they can mean to you. |
| State Comptroller Nancy Wyman |
As a participant in the State of Connecticut's Deferred Compensation Plan, you choose how to invest your account balance. If you decide that your current investments no longer meet your personal financial goals, you can transfer the dollars in your account to other investment options. However, before you make any such transfers, you should be aware that some financial services organizations may charge you a fee, called a contingent deferred sales charge, to make that transfer - and that could cost you money.
A financial services organization may apply a contingent deferred sales charge to your account when you transfer your funds out of their organization's investment option and into another organization's investment option. In addition, these fees may apply to transfers from Phoenix variable annuity contracts to Phoenix Investment Partners mutual funds.
This sales charge is referred to as "contingent" because it's applied only if funds are prematurely moved out of their investment option - that is, before the end of a predetermined schedule. If the funds remain on deposit until the end of the predetermined schedule, then the charge will not be applied.
This fee often decreases gradually until it disappears completely. The actual contingent deferred sales charge is usually equal to a percentage of the amount you're transferring. Please note that you will not pay this charge when you make a withdrawal for an unforeseeable financial emergency, retire from service or receive a death benefit.
You can now get the latest issues of Getting There and Investment Fund Performance & Operating Costs over the internet at: www.osc.ct.gov/empret
| Assets Transferred From | Type of Contribution Invested | Amount of Contingent Deferred Sales Charge | How Charge Is Applied | |
|---|---|---|---|---|
| Aetna Investment Services | Not Applicable | No Charge | Not Applicable | |
| Hartford Life Insurance Company* | Contributions received before January 1, 1999 | Participant's Contract Years | Apply this charge | Based on number of
participant's contract years completed with respect to a participant's account. Effective January 1, 2006, this charge will be discontinued. |
| 1 to 6 Years | 5% | |||
| 7 to 8 Years | 4% | |||
| 9 to 10 Years | 3% | |||
| 11 to 12 Years | 2% | |||
| 13+ Years | 0% | |||
| Contributions received on or after January 1, 1999 | No Charge | Not Applicable | ||
| Account values transferred from Travelers on March 20, 1999 | 5% Charge | Applies to all contributions originally
invested with Travelers. Effective January 1, 2004, this charge will be discontinued. |
||
| Phoenix Investment Partners | Contributions invested in Mutual Funds | No Charge | Not Applicable | |
| Phoenix Home Life Mutual Insurance Company | Contributions invested in Variable Annuity Contracts | Contributions in Contract for: | Apply this Charge: | Based on number of years contributions are in a contract. Contributions in a contract for more than five years will automatically be transferred , without charge, to a Phoenix mutual fund at the end of each calendar quarter. |
| Less than 1 year | 6% | |||
| 1 year | 5% | |||
| 2 years | 4% | |||
| 3 years | 3% | |||
| 4 years | 2% | |||
| 5 years | 1% | |||
| 6+ years | 0% | |||
| * Effective March 20, 1999, deferred compensation plan participant accounts with Travelers Life & Annuity were transferred to Hartford Life Insurance Company. Contingent deferred sales charges were not incurred by participants in connection with this transfer. | ||||
Suppose Jane decides to transfer $1,000 from one financial services organization into another organization's investment option. Let's also suppose that based on the first fund's contract, a 3% contingent deferred sales charge will be applied to make that transfer. In this case, Jane's account would be charged with a $30 ($1,000 x 3%) fee.
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