Tips for Choosing a VTSA Company

The following brief information is provided to help KU employees make informed decisions.  However, please contact a tax attorney or professional tax planner for complete details.

Before starting VTSA deferrals, research the available companies and the types of investments they offer.  Libraries have manuals that give ratings and information about insurance and investment companies.  Following is a chart of the ratings used by three of these manuals:

Standard & Poor's		Moody's		A.M. Best
Description	Ratings	Description	Ratings	Description	Ratings
Superior	AAA	Best Quality	Aaa	Superior	A++, A+
Excellent	AA	High Quality	Aa1, Aa2, Aa3	Excellent	A, A-
Good	A	Favorable	A1, A2, A3	Very Good	B++, B+
Adequate	BBB	Medium Grade	Baa1, Baa2, Baa3	Adequate	B, B-
Adequate but Vulnerable	BB	Uncertain	Ba1, Ba2, Ba3	Fair	C++, C+
Vulnerable	B	Undesirable Risk Characteristics	B1, B2, B3	Marginal	C, C-
Extremely Vulnerable	CCC	Poor Standing	Caa, Ca, C	Very Vulnerable	D
Regulatory Action	R			Under State Supervision	E
				In Liquidiation	F

When contacting a company, ask:

• For an explanation of their investment options and accompanying risks
• For a copy of the prospectus for each option
• For its rates of return on investments

For its policy on paying interest on money invested in the current year vs. money invested 5-10 years ago

• For its interest crediting policy
• For information comparing lump sum vs. annuity value of your investments
• For schedule on which they provide account statements and the information contained

About fees – they are known by different names but each of them reduce your investment contribution:

• Front End Load Fees
• Administrative Fees
• Management Fees
• Summary of Expenses
• Account Opening Fees
• Annual Maintenance Fees
• Exchange Fees
• Surrender Fees 

For its loan provisions, if any, the portion of your investment available for a loan, and the amount of interest to be paid on the amount borrowed

For its policy on moving funds from one account to another and/or to another company

For its settlement options at the time of retirement