Greater Financial Flexibility

By Amir Zaman,
WEA Insurance
employee benefits specialist

September 1997

TSA Trust adds options for investment

WEAC members who use or are interested in using a tax-sheltered annuity account to save for retirement have a plethora of options. So why would anyone choose the WEA Tax Sheltered Annuity (TSA) Trust — the program WEAC created just for members? Because, like the other WEAC programs, the WEA TSA Trust was formed to give members an option that was better than any offered by a commercial, for-profit company. For 20 years, the WEA TSA Trust has lived up to that promise.

Consider, for example, that almost every year since the WEA TSA Trust was created, the guaranteed interest rate offered to WEAC members for a fixed annuity was the highest available in our marketplace.

Beyond the guaranteed rate

While the fixed annuity with its guaranteed rate has been at the heart of the Trust’s program, members who are interested in tax-sheltered annuities have increasingly expressed great interest in the stock market. Over the past couple of years, therefore, the WEA TSA Trust has been researching ways to meet the needs of those members who want to take greater risks for the sake of possibly higher returns. Starting November 1, 1997, the Trust will give members more options from which to create a savings program tailored to their needs.

While the high-quality fixed rate annuity will continue to be available, members who want to invest their retirement funds in the stock market through the WEA TSA Trust will have an expanded menu of mutual funds to choose from (see box). In addition, members will now be able to put up to 80% of their funds into these mutual funds. This will allow more flexibility in creating personalized allocations among the fixed-income account and various stock funds.

Expert answers to questions

Members who are interested in mutual funds are well aware of the many funds available and the countless companies pushing those funds. What they get by going through the WEA TSA Trust is a program where both the investment choices and the staff advisors are carefully selected to help members achieve their retirement goals.

For example, members who open a tax-sheltered annuity with the Trust get access to salaried retirement consultants who are licensed securities representatives and have earned or are working toward completion of either a Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC) designation. Members thus have access to experts who are paid to help them with their TSAs and also assist with developing a complete financial strategy for their active and retirement years.

Expanded menu of mutual funds

The following funds will be available through the WEA TSA Trust beginning November 1, 1997.

Vanguard Institutional S&P 500 Index — This index fund attempts to provide investment results that parallel the performance of the Standard & Poor’s 500 Composite Stock Price Index. Given this objective, the portfolio is expected to provide investors with long-term growth of capital and income as well as a reasonable level of current income.

Domini Social Equity Fund — This fund seeks long-term return that corresponds with the performance of the Domini Social index, which consists of approximately 400 companies that meet certain social criteria. This index screens out tobacco stocks, and screens out companies with poor records in environmental and labor relations policy.

T. Rowe Price International — This stock fund seeks a total return on its assets from long-term growth of capital and income, principally through investments in common stocks of established, non-US companies.

T. Rowe Price New Era — This fund invests primarily in common stocks of companies whose earnings and tangible assets could benefit from accelerated inflation. It typically invests in companies that own or develop natural resources.

T. Rowe Price Small-Cap Value — This fund seeks long-term growth by investing primarily in smaller companies, using a value-oriented approach.

If you would like to receive more information about the planned improvements to your TSA program, or are interested in starting a tax-sheltered annuity, call 1-800-279-4030.

Posted September 8, 1997