Selecting an ORP/TDA Vendor

Planning and research are the keys to maximizing your ORP or TDA investment. Ask friends and colleagues who have invested successfully which products and companies they selected. Study product performance information. Narrow your choices to a handful of vendors and then visit with a representative of each vendor. Important questions include the following:

• How long has this company been in business?
• Where is your office? If you’re not available to answer questions or help me with my account(s), will anyone else be able to do so?
• How are you paid? What incentives are you given for servicing my account(s)? Do you get more commission or incentive for selling certain products?
• How many A&M System clients do you have?
• How many companies do you represent?
• How do you decide which products to recommend to particular clients?
• Do you offer both fixed investments with guaranteed interest rates and variable, high-growth investments?
• What have the earnings been on each product over the past year/five years/ten years?
• What fees will I have to pay (such as commissions, management fees or loads)?
• What risks are associated with each option?
• Can I invest in a combination of funds, and can I transfer money between funds? Is there a fee for transferring money?
• What payment options do you offer at retirement?
• How often do you provide account statements, and what information do they include?

Vendors can provide information on the investment options they offer, but selecting the investment is up to you. Keep in mind that variable, high-growth investments fluctuate over time, so earnings aren’t guaranteed, and it’s possible for your account to lose value. Earnings from a fixed investment, on the other hand, are often lower than those of a variable investment, but they are guaranteed. Remember: You’re responsible for your account’s growth through the investments you choose.

Product Performance Information

Product performance information on ORP and TDA vendors is updated annually and available on each vendor’s website. For more information, check the following sources, some or all of which may be available at your local library:

For product performance ratings on mutual funds, visit Morningstar.

For financial strength/credit ratings for an insurance annuity company, visit the web site of the following rating services listed below. The financial strength ratings are specific to the insurance company, not the products offered by that company.

Evaluation of Retirement Alternatives
Publisher: Texas Association of College Teachers
316 W. 12th St., Suite 210
Austin, TX 78701
(512) 477-7983

Best’s Insurance Reports
Publisher: A.M. Best Company, Inc.
Ambest Road
Oldwick, NJ 08858

Wiesenberger Investment Companies Service
Publisher: Warren, Gorham and Lamont
1633 Broadway
New York, NY 10019

Barron’s National Business and Financial Weekly
Publisher: Dow-Jones
200 Liberty St.
New York, NY 10281
(212) 416-2775

Standard & Poor’s Lipper Mutual Fund Profiles
Publisher: Lipper Analytical Service
60 New England
Summit, NJ 09701

This electronic file is not intended to give you tax or investment advice. You should contact a professional financial advisor for assistance with your personal investment situation.

Participation in the Optional Retirement Program (ORP) or Tax-Deferred Account (TDA) Plan entails certain responsibilities for the participant, including selection and monitoring of the vendor and the individual investment. The Texas A&M University System has no fiduciary responsibility for the financial stability of the ORP/TDA vendor or the market value of individual investments chosen by the participant.

Questions about any of this information? E-mail us and we’ll forward your questions to the appropriate Human Resources office.