Re: 1035 Transfer
The IRS allows the direct exchange of an existing annuity for a new contract free of any taxes on the income and investment gains in your current annuity. This means you can exchange your current annuity to Vanguard tax-free.
A tax-free 1035 exchange can be used to exchange:
A variable annuity for another variable annuity.
A variable annuity, previously funded with qualified money, for a fixed annuity to protect the value of your retirement savings for a shorter time period (3-10 years).
A tax-deferred annuity to purchase an income annuity, when you are ready to take income in retirement.
About those surrender charges:
You should check this with Vanguard, but I'm fairly certain you will pay any and all surrender charges.* After deducting the charges and any losses you may have, your new basis is established (for the new annuity)
I would guess that a "1035 exchange" search at irs.gov would give you all (and more) that you would ever want to know. :P
One other thing, the transfer process can be painfully slow if that matters to you.