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I would suggest reposting this question at fairmark.com, where it will collect responses from accountants, enrolled agents, and the like. They can quote sections of IRS publications and tax law, if you like.
The annuity shouldn't foul anything up from a procedural perspective. In most cases, people transfer their 401Ks/403Bs to IRAs once they leave a company anyway.
Where it does matter is from a cost perspective. Annuities tend to be used more by small companies. That's because they can't afford to pick up the administrative costs of the plan, and the annuities provide a way to shift the costs to you, the employee.
The annuity wrapper costs money (typically around 1.25%). That money is being taken out of your plan accounts in addition to the ER of the underlying funds. Because the insurance company is making money on the annuity, it (probably) doesn't charge to administer the plan. (Slight simplification, but gets the basic idea right.)
In addition, if the annuity is using B shares, you could get dinged if you transfer money to an IRA too soon. (B shares typically have "contingent deferred sales charges" - back end or exit loads that gradually reduce to zero over time.)
That's very clear. I thank you! Our fund's ticker--- if memory serves me--- is a proprietary ticker, identifying that account, in THAT fund, is a 403b annuity thing-y with Mass Mutual. The people at the employee benefits office are freakin' clueless. You have a question? Talk to Mass Mutual. we know nothing from nothing about anything. We have no idea what you're talking about. Is the world flat or round? We don't know...
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Where it does matter is from a cost perspective. Annuities tend to be used more by small companies. That's because they can't afford to pick up the administrative costs of the plan, and the annuities provide a way to shift the costs to you, the employee.
The annuity wrapper costs money (typically around 1.25%). That money is being taken out of your plan accounts in addition to the ER of the underlying funds. Because the insurance company is making money on the annuity, it (probably) doesn't charge to administer the plan. (Slight simplification, but gets the basic idea right.)
In addition, if the annuity is using B shares, you could get dinged if you transfer money to an IRA too soon. (B shares typically have "contingent deferred sales charges" - back end or exit loads that gradually reduce to zero over time.)