Updated August 25, 2026. Quick answer: Published 403(b) surrender schedules are longer and steeper than the seven-year convention: the longest active schedule in California’s registry runs 16 years and the steepest opens at 15 percent, and 59 of the 70 active annuity products carry one against 4 of 64 fund products. Because an in-plan exchange is not a distribution, the charge is the whole cost — no income tax, no additional tax — which turns the decision into one division.
What is usually said, and what the sources say
Surrender charges are usually described in the abstract, as seven years declining from seven percent, and then the decision is framed as whether it is worth paying a one-time charge to escape a bad product.
The schedules are published, product by product, in one state’s official registry, and they are longer and steeper than the convention: the longest active schedule runs sixteen years and starts at fifteen percent. And the framing is wrong in a way that matters, because an in-plan exchange is not a distribution. The charge is the whole cost. There is no income tax on the gain and no additional tax, because nothing is distributed.
What the schedules actually are
California requires every registered 403(b) vendor to disclose “A disclosure of all expenses paid directly or indirectly by retirement plan participants, including, but not limited to, penalties for early withdrawals, declining or fixed withdrawal charges, surrender or deposit charges, management fees, and annual fees” (Cal. Educ. Code sec. 25101(a)(3)). The result is the only published, product-level surrender data we found anywhere, and it does not look like the seven-years-at-seven-percent convention.
| Vendor | Product | Type | Schedule length | Opening rate | Final published step | Source |
|---|---|---|---|---|---|---|
| Industrial-Alliance Pacific Life Ins Co, US Branch | GoldenPlus | Equity Indexed Annuity | 16 years | 15% | 0% in year 16 | registry entry |
| Midland National Life Insurance Company | MNL IndexBuilder 14 | Equity Indexed Annuity | 14 years | 12% | 1% in year 14 | registry entry |
| North American Company for Life and Health | North American Charter Plus 14 | Equity Indexed Annuity | 14 years | 12% | 1% in year 14 | registry entry |
| Midland National Life Insurance Company | MNL RetireVantage 14 | Equity Indexed Annuity | 14 years | 10% | 1% in year 14 | registry entry |
| Metropolitan Life Insurance Company | MetLife Financial Freedom Select (MFFS) | Variable Annuity | 13 years | 9% | 0% in year 13 | registry entry |
| Industrial-Alliance Pacific Life Ins Co, US Branch | Charter Annuity Advantage | Fixed Annuity | 11 years | 10% | 0% in year 11 | registry entry |
| Industrial-Alliance Pacific Life Ins Co, US Branch | Freedom Flex I | Fixed Annuity | 11 years | 10% | 0% in year 11 | registry entry |
| Industrial-Alliance Pacific Life Ins Co, US Branch | GoldenFlex X | Equity Indexed Annuity | 11 years | 10% | 0% in year 11 | registry entry |
The eight longest published surrender schedules among the 134 active products, longest first. 63 active products publish a schedule at all; 26 of those run ten years or longer. California requires the disclosure by statute: “A disclosure of all expenses paid directly or indirectly by retirement plan participants, including, but not limited to, penalties for early withdrawals, declining or fixed withdrawal charges, surrender or deposit charges, management fees, and annual fees” (Cal. Educ. Code sec. 25101(a)(3)).
The longest active schedule runs 16 years. The steepest opening rate among active products is 15 percent. 26 of the 63 active products that publish a schedule run ten years or longer. A teacher who signed a form in a staff room at twenty-eight can be inside a lock-up until forty-four.
The split by product type is the other half of the picture: 59 of the 70 active annuity products carry a surrender schedule, against 4 of the 64 mutual-fund products. This is not a fee that attaches to retirement accounts. It attaches to one kind of product inside them.
Check the plan against the rest of your retirement savings
A 403(b) decision usually turns on what the product costs, what leaving it would cost and what else you are saving into, and an adviser can weigh those together.
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The charge is the whole cost, and that changes the sum
The usual way to price an exit is three-part: the surrender charge, the income tax on the gain, and the additional tax if you are under 59 and a half. For a move inside the same 403(b) plan, two of those three are zero, and not by luck. The regulation says “Neither a plan-to-plan transfer nor a contract exchange permitted under this paragraph (b) is treated as a distribution for purposes of the distribution restrictions” and that “no amount is includible in gross income by reason of such a transfer or exchange” (26 CFR 1.403(b)-10(b)(1)(i)).
So the decision reduces to a single division: the one-time charge, over the annual saving. Everything else people worry about in this decision belongs to a different transaction — taking the money out — and if that is what you are doing, our annuity surrender calculator prices all three parts.
The saving side has a published benchmark. The registry attaches a standardised annual cost to each product: “A calculation provided to help estimate the average amount one might expect to pay annually, based on a $10,000 investment.” (CalSTRS 403bCompare, Annual Cost definition). Across the active list, the annuity products that publish one have a median of $209 a year per $10,000; the fund products have a median of $143.50, and the cheapest sits at $54.
| Surrender rate you are in | Charge on $50,000 | Annual saving at the two median costs | Break-even | In years |
|---|---|---|---|---|
| 2% | $1,000 | $765 | 16 months | 1.3 years |
| 4% | $2,000 | $765 | 31 months | 2.6 years |
| 6% | $3,000 | $765 | 47 months | 3.9 years |
| 8% | $4,000 | $765 | 63 months | 5.2 years |
| 10% | $5,000 | $765 | 78 months | 6.5 years |
Worked at the registry’s own medians: $209 a year per $10,000 for the annuity products that publish a cost, against $56 for CalSTRS Pension2 – Personal Wealth Plan, both scaled to a $50,000 balance. Your own two numbers replace both.
Read the last column, not the first. At the median rates in this registry, a mid-schedule surrender charge on a $50,000 balance is repaid in years, not decades — and the years you would otherwise spend waiting out the schedule are years of paying the higher cost. The break-even calculator runs it on your own five numbers.
What the registry does not tell you, and your contract does
A percentage is not a charge. Contracts differ in what the rate is applied to — the account value, the original premiums, or whichever is greater — and many let a free-withdrawal amount out each year before any charge applies. The registry publishes the rate and the year. It does not publish the base, and the base can move the answer by a large fraction.
The other half of the asymmetry is what is missing. 0 of the 48 active fixed and equity-indexed annuity products publish an annual cost figure at all, while 64 of 64 fund products and 22 of 22 variable annuities do. How to read the list works through why.
What this page does not settle
This page reports published surrender schedules and works a break-even at published medians. It does not price your contract.
Every surrender figure on this page comes from products registered for sale to California school employees. A product sold in another state under another name may carry a different schedule, and no national registry exists to check it against.
A surrender percentage is not enough to compute a charge on its own, because contracts differ in what the percentage is applied to – account value, original premiums, or whichever is greater – and in what free-withdrawal amount comes out first. The registry publishes the percentage and the year. It does not publish the base.
The registry’s annual cost is a single standardised figure on a $10,000 balance in one fund. It is a comparison tool, not your statement. Optional riders, multiple funds and a different balance all move it, and the site says so.
Sources
- 26 CFR 1.403(b)-10(b)(1)(i) — https://www.law.cornell.edu/cfr/text/26/1.403(b)-10
- Cal. Educ. Code sec. 25101(a)(3) — https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=EDC§ionNum=25101.
- CalSTRS 403bCompare, Annual Cost definition — https://www.403bcompare.com/Products/54
- CalSTRS 403bCompare, product page footnote — https://www.403bcompare.com/Products/54
- CalSTRS 403bCompare product registry, fetched 2026-08-25 — https://www.403bcompare.com/ProductCompare
Related: 403(b) Surrender Charge vs Stay Calculator · 403(b) Contract Exchange · How to Read a District’s Approved 403(b) Vendor List · Annuity surrender calculator · Does a 1035 exchange restart the surrender charge · The annuity you already own.
General information drawn from the federal statutes and regulations, the California Education and Insurance Codes and the CalSTRS 403bCompare registry named above, not legal, tax or financial advice. Statutes are amended and registered products change; the figures here are what each source said on the date above, and each is linked so you can check it.