I am employed by a city that offers tax shelter annuity (TSA) options, mainly 13 insurance companies. Recently, one mutual fund was added, but it charges 8 1 /2 percent commissions. In presenting the choices, the representative of the company hired by the city to manage the TSA program promoted one of the insurance companies over the mutual fund. How can a person evaluate the choices available? C. C.
Generally, the opportunities available to participants of a TSA program are limited to insurance agencies and a few mutual funds willing to spend the time and effort to administer the proceeds. Many of the participants are attracted to the guaranteed results offered by an insurance company and fail to appreciate the possibilities for growth in equities. Also, the charges are less visible in most insurance fund offerings than in the disclosures that accompany mutual funds. A representative advising TSA program participants may earn a commission from one or more of the options available. His self-interest depends on convincing participants that his program is superior. If all options are represented in a presentation, which is unlikely, you would be able to choose more effectively. more likely, you will need to dig for more facts and information on your own. don't depend exclusively on information from one or two representatives. Check into the costs of each option and its track record. It's your money that is being invested, and you should be fully aware of the prospects.
Readers are invited to send questions to Moneywise, Box 102, Mercer Island, Wash. 98040. Only questions covering topics of general interest can be answered here, and no question can be individually acknowledged. References to specific stocks, funds, or other investments in this column are intended for the general information of readers and not as an endorsement or recommendation by The Christian Science Monitor.m