Since the Department of Labor released its proposed conflict-of-interest rule last April, which would make all advisors to IRA accounts and advisors to most of the country’s 401(k) plans fiduciaries, the plight of Merlin Toffel and his wife has been leveraged as reason the extensive regulation is necessary.

The Toffels allegedly lost a considerable chunk of their retirement nest egg when they were advised to put their retirement savings in a variable annuity that came with 4 percent annual fees and severe surrender fees.

Labor Secretary Thomas Perez has cited the Toffels in Congressional testimony defending the necessity and extent of the proposed legislation.

But new research sponsored by the American Council of Life Insurers, a leading lobby for annuity providers, claims that most people who redeem the full or partial principle invested in variable annuities face no fees for doing so.

Surrender charges on the controversial annuity products decrease annually, often beginning at 7 percent of accumulated value in the first year, and decreasing until the penalties go away after the seventh year, according to a release from ACLI accompanying the study.

Intended as long-term investment and income vehicles, most of the 18 million variable annuities in circulation today are being used for just that, and do not incur surrender charges, the study found.

Most of the insurers reviewed in the study—10 of the 13—offer contracts without surrender charges.

All of the insurers in the study that do have surrender charge policies allow some percentage of contracts’ value to be withdrawn each year without a charge, according to the study.

The average fee paid for contracts that are fully surrendered is 1.5 percent, the report found. For accounts that are partially surrendered, the average redemption fee is 0.4 percent.

“One data point makes it especially clear that fees on surrenders are low,” said ACLI vice president Andrew Melnyk.

“It shows that in dollar terms, the average amount paid for a full surrender is approximately $750 on an average surrender amount of $100,000,” he said.