How to Get Out of AXA/Equitable 💸
One of the most popular discussion threads on the 403bwise Facebook Group is how to get out of an AXA/Equitable 403(b). The stories are remarkably similar: Unknowing teacher sold a high-cost variable annuity product in the staff lounge, classroom, or at an off campus appointment. Teacher learns how bad it is and wants to get out of it.
As I documented in a recent blog post called Welcome to the Hotel AXA/Equitable you can "check out" but it is not easy. One of our most prolific posters, "krow36," compiled a "How to get out of AXA/Equitable" document. He was inspired by the numerous posts asking how to do this. As an example of the amazing collaborative work being done on the 403bwise Facebook Group, I wanted to share his good work.
Summary of How to Exit AXA/Equitable
- To begin the transfer process, request a transfer form from AXA/Equitable (800-628-6673; M-Th 8am-7pm EST; Fri 9am-5pm PST). It will contain a unique transfer number. This form is only valid for 90 days. After that point you will have to start again. Here's a sample form.
- Open a new account with a better vendor available through your employer. Ideally you have access to one of these companies: Aspire, CalSTRS Pension 2 (California), Fidelity, TIAA, T. Rowe Price or Vanguard.
- Confirm that the new vendor will sign the transfer form (it is in their interest!). In one of the cases documented on the 403bwise Facebook Group, instead of signing the AXA/Equitable form, Vanguard issued a separate "Letter of Acceptance" for the transfer. Ask new vendor to return signed tansfer form to you.
- Send completed transfer form to the Third Party Administrator overseeing your plan (if applicable).
- Send completed packet to AXA/Equitable.
- Call and confirm that materials have been received each step of the way (third party administrator; new vendor; AXA)
- It is highly recommended that a copy of all forms submitted be made in case items are lost.
Notes on the Transfer Form
- Pg. 1: 2A.1. Direct Transfer is what most folks will be making when their employer offers more than one 403(b) vendor. Since it is a trustee-to-trustee transfer, the money does not pass through the owner’s hands. (Notes: a 403(b) can be an annuity contract or a custodial account. TSA stands for Tax Sheltered Account or Annuity).
- Pg. 1: 2A.2. Contract Exchange is where an account’s balance is moved from a previous employer’s plan to the current employer’s plan. This can happen if you have changed districts.
- Pg. 1: 2A.3. Direct Rollover from a TSA is what you use if moving your 403(b) to a Rollover IRA (in the case of separating service from employer with which you had the AXA/Equitable account). A Qualified Plan could also be a 401(k). With a direct rollover, AXA/Equitable may send you a check made out to the company receiving the money. Upon receipt of check send it immediately to new vendor. If given a choice between a Direct Transfer and a Direct Rollover, choose the former as the money will go directly to new vendor.
- Pg. 1: 2A.4. Rollover Conversion to a Roth IRA rather than to a traditional IRA might make sense if the account was relatively small (must have separated from service). That’s because the amount rolled over will add to your taxable income for that year.
- Pg. 2: Sec. 2.B. Amount to be Transferred/Exchanged or Rolled Over check bottom box "Total Transfer/Exchange or Rollover"
- Pg. 3: Sec. 3 Acceptance of Transfer/Exchange or Rollover This page is to be completed by new vendor
- Pg. 4: Sec. 4.A and 4.B. Read. Nothing to check unless you are dealing with a divorce or death.
- Pg. 5: 4.C. For Conversion Rollovers Only concerns a conversion to a Roth IRA. 4.D. For All Transactions Read carefully before signing. Spouse signs only in case of a divorce resulting in a QDRO.
- pg. 6: 5A. Spousal Consent for Plans subject to ERISA. Very few K-12 403(b) plans are subject to ERISA. Confirm with your district’s TPA that the district’s plan is not an ERISA plan.
- Pg. 6: 5B. Employer/Plan Administrator’s Acknowledgement Top section is for a former employer’s TPA to complete and sign. The bottom section is for your current employer’s TPA to complete and sign.
Please note that "krow36" is providing this information to the best of his knowledge. The AXA/Equitable transfer process is subject to change at any time. Ultimately, those transferring will have to carefully navigate this process. The 40bwise Facebook Group community can help and guide this process. (Note: in order to join the Group you must answer the three questions to be admitted).
Thank you again, "krow36" and all of the 403(b) advocates working hard to improve the retirement outcomes of teachers and other school employees. Another resource: How to Get Out of a Bad 403(b).
Stay wise and well.
Related Podcast: Dealing with a Bad 403(b) Plan
Dan and Scott offer advice on what to do if stuck with bad 403(b) choices. Topics covered include: How to know if you have a bad 403(b); steps to take to get a better plan; and foregoing a 403(b) for a Roth IRA. Listen Now »
Getting Out of a Bad 403(b) Annuity New Jersey teacher was sold multiple, terrible, misleading variable annuity products. Listen Now »