The goal for participants of contributing to a 403(b) plan is to grow their wealth for the future. However, revenue-sharing is polluting the space. There is no legitimate oversight for non-ERISA 403(b) plans and certain products, like indexed annuities and fixed annuities, are basically looked after by insurance lobbyists.

Given that information, it explains why 76% of 403(b) accounts are invested in annuities. CA teachers, on average, pay 1.96% for their 403(b) investments (1.78% for mutual funds and 2.22% for annuities; though the actual fee range for all products is between 0.56% and 4.58%). Additionally, 70% of the products sold involve sales commissions and 60% of participants pay surrender fees.

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