Index Page No. There are different types of compulsory annuities/pensions that you can buy, these are grouped within two main classes:

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Index Page No. There are different types of compulsory annuities/pensions that you can buy, these are grouped within two main classes:"

Transcription

1 RETIREMENT INCOME PLANS Key Features of Compulsory Annuities Index Page No. 1. Introduction 1 2. Choice 1 3. Conventional Compulsory Annuities 2 4. Living Annuities (LAs) 3 Annexure A 4 A. How does a conventional compulsory annuity work? B. How does a compulsory living annuity (LA) work? C. How does life insurance work? D. General Annexure B 6 A. Standard types of conventional annuities normally sold B. For illustration purposes 1. Introduction In terms of current law when you retire from a Pension Fund or a Retirement Annuity (RA) Fund (subject to certain concessions for small amounts) you are required to use at least two thirds of the proceeds of your Pension or RA Fund to buy an annuity/pension, which will provide you with an income during your retirement. This is referred to as a compulsory annuity/pension. 2. Choice There are different types of compulsory annuities/pensions that you can buy, these are grouped within two main classes: i. Conventional annuities/pensions of which there are many types, and ii. So called Living Annuities (LAs). Sometimes also referred to as market linked or equity linked living annuities. It is important that you understand how these work so that you can choose the right option to meet your retirement income needs. As these options all have advantages and disadvantages, you need to understand the benefits and risks attached to each plan and in the case of LAs also the associated costs so that you can make an informed choice on which option is best suited to your retirement needs. It is very important that you seek professional and unbiased advice before you make a final selection. See Annexure A for more information on how (A) conventional compulsory annuities and (B) compulsory living annuities work. 1

2 3. Conventional Compulsory Annuities 3.1. You can usually plan for your retirement from a retirement annuity (RA) as RA benefits can be taken any time after age 55 and unlike a pension fund it is not linked to your retiring from employment. It is this aspect of a RA that enables one to plan the purchase of a compulsory conventional annuity when interest rates and annuity rates are expected to be at their highest. This is because the older you are when you buy the annuity the better the annuity rate will be as your life expectancy will decrease and the insurer will then have to pay you for an assumed shorter period. Also because the annuity is guaranteed, the insurer will use safer interest bearing investments like government bonds to back annuity payments. Market related interest rates, at the time of buying the annuity, will also determine how much you will get. 3.2 In terms of the rules of some pension and most RA funds the retirement capital is untied which means you can purchase an annuity from a life insurance company of your choice, thereby allowing you to shop around for the best annuity rates in the market. While the amount of money you will receive is certainly probably the most important consideration it is not the only factor for you to take into account. For example you also need to have faith that the insurer you choose will remain in business long enough to make these payments to you and that the service they will provide to you is acceptable, etc. 3.3 Various annuity options are available to meet retirement needs such as: i. level annuities ii. inflation-linked growth annuities iii. with profit annuities iv. joint and survivorship v. life annuities with or without guaranteed periods Depending on your state of health and family situation at retirement you can choose an appropriate annuity option. See Annexure B for an explanation of these options. 3.4 These annuity payments are guaranteed so that in general one knows exactly how much (or how little) you will be receiving as income, thereby allowing you to plan more accurately. 3.5 The longer you outlive your life expectancy on which the annuity has been calculated the more you benefit. 3.6 The annuity is free of estate duty, but subject to income tax. The full annuity is included in your gross income to be taxed at your specific marginal tax rate. 3.7 Once you have purchased your conventional annuity you cannot change it later on. It is therefore very important that an informed decision is taken when selecting the annuity option and due consideration is given to your circumstances and that of your beneficiaries. Wealth Warning a) It is important to note that the capital will be lost on your death, unless you have selected one of the following options: i. a joint and survivorship plan, or a ii. guaranteed term and die within this term, or iii. secured your capital that is used to buy the annuity with a life policy. 2

3 If you die soon after purchasing the annuity without electing any of these options then those whom you leave behind will not achieve a return on your capital invested in the plan. b) These annuities are safe provided the life assurer backing these investments remains in business to pay the annuity. It is therefore advisable to ensure that you select a product provider that has a good and sustainable track record. c) Conventional annuities, especially fixed rate level annuities, are particularly exposed in times of high inflation. For example, inflation at 10% will halve the purchasing power of your annuity payments every 7 years. Many retirees choose a fixed rate level annuity plan because it starts off paying a higher income than other plans from day one. However, the possible impact of moving into periods of high inflation, poses a risk with this option which could get worse the longer you live. 4. Living Annuities (LAs) 4.1 You are not obliged to lock yourself into an annuity at a specific rate, especially when interest rates are low at the time of purchasing the LA. 4.2 You can manage the income stream you receive from the annuity from year to year as this can range between 2.5% and 17.5% per annum, of the capital value, to suite both your income needs and tax position. 4.3 You are able to select the underlying investments of your LA. This freedom of choice allows for the potential for continued growth after retirement by choosing that some of your funds be exposed to growth investments like equities and property. 4.4 Unlike a conventional annuity, a LA does not die with you but the balance in the fund can be left to your beneficiaries after your death, to be paid out as an annuity or a lump sum or a combination of these. 4.5 You can switch to a guaranteed conventional annuity later on should your risk profile change during your retirement or because of your age or due to interest rates at the time affording you a good annuity rate (see 3.1). 4.6 The annuity you draw down as income is free of estate duty, but subject to income tax. Very importantly your LA fund currently accumulates growth free of all taxes. Wealth Warning a) Returns under a LA are not guaranteed and depend on the performance of the underlying investments chosen by you to back the annuity payments. Your fund can therefore either increase or decrease in value. b) You carry the full investment risk. It is absolutely vital therefore that a correct risk assessment for your retirement needs is done during the pre-purchase phase and that you understand all the consequences of the plan before purchasing such an annuity. c) There is also a risk that if you draw down (i.e. your income) more than the rate at which your fund is growing that you will run out of retirement capital before you die. d) Make sure that you read and understand all the necessary disclosures that are required to be made to you before buying this product and the consequential impacts these may have on your retirement circumstances. 3

4 ANNEXURE A A. How does a Conventional Compulsory Annuity work? 1. You use your retirement fund capital to buy an annuity from a life insurance company. 2. By doing this you effectively give up your capital to the insurer, meaning that your capital then no longer belongs to you. In return for this the insurer undertakes to pay you a guaranteed income until you die. 3. The income stream the insurer pays you depends mainly on your current age and the prevailing interest rates at the time of purchase and the type of compulsory annuity you purchase. 4. The insurer takes a calculated bet based on actuarial assumptions on how long you are expected to live. If you die soon after buying the annuity not having, for example, a guaranteed payment period, or a joint and survivorship option or having secured the capital with a life policy the capital will be gone and this could represent a bad return on your investment. On the other hand if you live longer than expected you will benefit from a return perspective. 5. As with other aspects of financial planning, if you know exactly when you will die it makes planning a lot easier but for most of us our date of death remains unknown. 6. Understanding how life assurance works (See C below) might also help you better understand how your conventional compulsory annuity works. B. How does a Compulsory Living Annuity (LA) work? 1. You use your retirement fund capital to buy an annuity from a LA provider (currently a life insurance company). 2. You again give up your capital which then belongs to the insurer but it is administered on your behalf, in your personal fund, for your benefit. 3. You elect the underlying investments to be held in the fund. 4. You have the right to draw down between 2.5% and 17.5%, of the capital amount in your personal fund, as an annual income. 5. You have the right to change your elected draw down rate on the policy anniversary. 6. Unlike a conventional annuity you have the right to nominate a beneficiary to any remaining money in your LA fund when you die, the capital therefore does not necessarily die with you. 7. As there are no guarantees with this investment you carry all the risks of the performance of the underlying investments you have chosen and drawing down too much income could deplete your fund before you die. 8. For further information on LAs you are also referred to the ASISA Standard on Living Annuities which is available on the ASISA website go to Members Standards Long Term Insurance and select the ASISA Standard on Living Annuities link. The URL to this page is 4

5 C. How does Life Assurance work? 1. Life assurance can be seen as the opposite of a conventional annuity where you give up your capital in return for an income stream. 2. With life insurance you pay regular premiums (income stream) to the insurer who undertakes to pay out a capital lump sum on your death. 3. Again in setting the amount of the premiums you will pay for the life cover the insurer will make assumptions on how long you will live (it is for this reason that the insurer is interested in the state of your health and your age), what returns the insurer will earn on the premiums you pay them and what their costs will be. It also depends on the type of life assurance policy you buy, for example cover for only a specified term or whole of life. 4. Unlike a conventional annuity where the longer you live normally results in the better investment for you, with life assurance the sooner you die the better your return will be. For example the full capital will be payable even though you might only have paid one or two premiums, assuming that you have a valid claim. D. General Both conventional annuities and ordinary life assurance works by pooling the risks of all the policyholders together and there is, as a result some form of cross subsidisation. This is standard industry practice worldwide. Life assurance would be too expensive and annuity rates too unattractive if it was just sold on an individual risk basis and not within a common risk pool. The trade-off is maximising income versus capital preservation. It has often happened that a retiree elects a level fixed compulsory annuity with none of the capital preservation options and dies shortly after purchasing the annuity. Because of the way these annuities currently work, their beneficiaries/ dependants cannot understand why there is no capital left for them and then accuse the insurer of stealing the deceased s annuity capital. This is an unfair accusation - assuming of course that the retiree received appropriate advice and information and understood all the consequences - because this option would have been selected to get the maximum amount of income from day one because it suited the retiree s needs. The flip side of this is that nobody ever complains when a life assured dies having only maybe paid a few premiums for their life cover and the insurer then pays out the full sum assured. Understanding how these plans work and the options you have available will hopefully allow you to make better decisions both to suit your retirement income needs and the needs of your dependents. With a living annuity you have flexibility and choice but this comes at a higher cost and increased risk. You can however switch from a living annuity to a conventional annuity at a future date. With a conventional annuity you have a guaranteed income for life but the trade-off is no flexibility. So you need to make the right choice upfront as you only have one bite of the cherry to get it right. Lastly, it need not be a case of one type of compulsory annuity over another. Depending on your situation, the best fit may be a combination. 5

6 ANNEXURE B A. Standard types of conventional compulsory annuities normally sold: Level Annuity (Option 1) You receive the same monthly amount for the full term of the annuity. Your pension will start off higher than those of other guaranteed annuities, but beware of the big inflation risk. Escalating Annuity (Option 2) Your pension will increase either by a predetermined, fixed amount each year or the increase can be linked to inflation. Enhanced Annuity, also sometimes referred to as Impaired Life Annuities (Option3) These annuities pay a higher amount to people who can prove that they may have a shorter-thanaverage lifespan because they have a health condition or who lead an unhealthy lifestyle (for example, heavy smokers). This is because the insurer makes an assumption they only have to pay the annuity for a shorter period. Only a few smaller niche insurers currently offer this type of annuity in South Africa. Joint and Survivorship Annuity (Option 4) This option ensures that the last-surviving member of a spousal couple receives a pension for life. You normally have the option to elect what percentage of the original pension the survivor should receive. This election in turn will impact on the amount of money you can draw down as an income. Capital-back Annuity (Option 5) The purpose of this option is to ensure that where you have not elected a guaranteed payment period that when you die your capital is not lost but will be paid to your nominated beneficiaries/dependents or estate after your death. This option consists of two parts: An annuity portion, which can be a level, escalating or enhanced annuity; and A life assurance policy which can be taken out normally without evidence of health. Part of your pension payments are then used to pay the life assurance premiums. Depending on your age this can be quite an expensive option which means you will then have less income for your retirement. So again it is a trade-off based on what your needs are. Guaranteed Life Annuity (Option 6) Your pension is guaranteed not only for your life time but also for a fixed number of years (normally 10 to 20 years), whether or not you live for that entire period. For example if you elect a 10 year guaranteed period and die after 6 years the insurer will still pay your pension out to your nominated beneficiaries/dependents for the remaining 4 years after which it will cease. Your starting off income amount will be lower with the longer the guaranteed period selected. 6

7 With Profit Annuity (Option 7) A with-profit annuity is a combination of a guaranteed annuity, because your initial pension is guaranteed for life and any pension increases you receive are added to the initial guaranteed amount. The increases, however, are not guaranteed. They are based on the profits/investment returns on your initial investment, less costs and the profits of the assurance company. The increases are smoothed meaning that excess performance in good years is held back for years when performance is not good. This means that even if no increase is allocated for a year you should not get less than what you received for the previous year but over time the pension should increase. B. For illustration purposes only Herewith quotes, received during April 2012, of possible monthly annuity amounts, applicable for the various standard types of conventional compulsory annuities, received from a life assurance company. These quotes assume a male aged 65 with spouse aged 60 with a R5 million purchase consideration. These quotes will give you a general idea of the possible expected monthly annuity income that each option may generate. Annexure B Heading Gross Monthly Income Description Option 1 R 47, Single Life Level Annuity with no guaranteed term Option 2 (a) R 33, Single Life 5% Escalation Annuity with no guaranteed term Option 2 (b) R 26, Single Life CPI Escalation Annuity with no guaranteed term Option 3 R49, Single Life Level Annuity with no guaranteed term (Smoker) Option 4 R 39, Joint Life Level Annuity with no guaranteed term Option 5 R 37, Single Life Level Annuity with no guaranteed term Option 6 (a) R 44, Single Life Level Annuity with 10 year guaranteed term Option 6 (b) R 39, Single Life Level Annuity with 20 year guaranteed term Option 7 R 35, Single Life With-profit (3.5% pricing rate) Annuity with no guaranteed term Other Assumptions Contract Start Date 2012/04/01 Date 1st income payment 2012/05/01 Issue-able Date 2012/04/01 Commission (including VAT) 1.71% Gender of First Life Covered male DOB of First Life Covered 1947/01/01 Gender of Second Life Covered female Date of Birth of Second Life Covered 1952/01/01 % to which annuity reduce on death of First Life Covered 75% % to which annuity reduce on death of Second Life Covered 100% 7

the annuity y(p (pension) maze

the annuity y(p (pension) maze the annuity y(p (pension) maze Bruce Cameron Editor: Personal Finance the annuity maze warning!! no annuity will make up for a shortfall in retirement savings increasing your investment risk is not a solution

More information

Financial Planning & Guidance. A Guide to Annuities. Creating your success through Financial Planning

Financial Planning & Guidance. A Guide to Annuities. Creating your success through Financial Planning & Guidance TA Contents I m approaching retirement, what are my financial options? 02 What is a Financial Broker? 03 Why would I need to use a Financial Broker? 03 What is an annuity? 05 A Guide to Annuities

More information

THE TRUSTEES RECOMMEND THAT YOU ASK FOR THESE QUOTES TO BETTER UNDERSTAND YOUR OPTIONS. THERE IS NO OBLIGATION TO ACCEPT THE QUOTES.

THE TRUSTEES RECOMMEND THAT YOU ASK FOR THESE QUOTES TO BETTER UNDERSTAND YOUR OPTIONS. THERE IS NO OBLIGATION TO ACCEPT THE QUOTES. Annexure 1- Detailed Guide CAPE PENINSULA UNIVERSITY OF TECHNOLOGY RETIREMENT FUND COMMISSION FREE PENSION QUOTATIONS When you reach retirement, you will face a difficult decision as to what pension to

More information

Enhanced Annuities. Contact us at info@justretirement.co.za 1

Enhanced Annuities. Contact us at info@justretirement.co.za 1 This brochure gives a brief explanation of Just Retirement Enhanced Annuities, all of which provide a guaranteed income for life. It explains who may qualify for a higher retirement income from this product

More information

Financial Planning & Guidance. A Guide to Annuities. Creating your success through Financial Planning

Financial Planning & Guidance. A Guide to Annuities. Creating your success through Financial Planning & Guidance TA Contents I m approaching retirement, what are my financial options? 02 What is a Financial Broker? 03 Why would I need to use a Financial Broker? 03 What is an annuity? 05 A Guide to Annuities

More information

MANAGING YOUR BENEFITS AT RETIREMENT AT NORMAL RETIREMENT AGE OR EARLIER

MANAGING YOUR BENEFITS AT RETIREMENT AT NORMAL RETIREMENT AGE OR EARLIER MANAGING YOUR BENEFITS AT RETIREMENT AT NORMAL RETIREMENT AGE OR EARLIER Managing your benefits at retirement If you retire at your normal retirement age, or earlier A step-by-step guide to retiring from

More information

All about Annuities. What annuity products are available from Irish Life? What is an annuity?

All about Annuities. What annuity products are available from Irish Life? What is an annuity? All about Annuities Irish Life appreciates that you have worked hard to save for your retirement. Deciding what to do with your pension fund is one of the most important decisions you will have to make.

More information

ALL ABOUT ANNUITIES JUNE 2015 WHAT ANNUITY PRODUCTS ARE AVAILABLE FROM IRISH LIFE?

ALL ABOUT ANNUITIES JUNE 2015 WHAT ANNUITY PRODUCTS ARE AVAILABLE FROM IRISH LIFE? PENSIONS INVESTMENTS LIFE INSURANCE ALL ABOUT ANNUITIES JUNE 2015 Irish Life appreciates that you have worked hard to save for your retirement. Deciding what to do with your pension fund is one of the

More information

RETIREMENT FUND MEMBER INFORMATION

RETIREMENT FUND MEMBER INFORMATION RETIREMENT FUND MEMBER INFORMATION OPTIONS ON RESIGNATION, RETRENCHMENT OR DISMISSAL If you resign, or are retrenched or dismissed, your membership of your retirement fund will come to an end. The fund

More information

The. OPN Living Annuity. Your post-retirement income solution

The. OPN Living Annuity. Your post-retirement income solution The OPN Living Annuity Your post-retirement income solution OPN Living Annuity OPN Living Annuity Suitable for Members retiring from the OPN Personal Pension, or any other RA, Pension, Provident or Preservation

More information

HOW MUCH WILL MY PENSION BE?

HOW MUCH WILL MY PENSION BE? HOW MUCH WILL MY PENSION BE? The monthly pension you receive will depend on: How much of retirement benefit you decide to use for a pension benefit In the case of a life annuity the provision you make

More information

A Guide to Life Insurance Cover Creating your success through Financial Planning

A Guide to Life Insurance Cover Creating your success through Financial Planning & Guidance A Guide to Life Insurance Cover A Guide to Life Insurance Cover Financial Broker Contents How can I protect my family financially if I die? 02 What is life insurance? 03 What is a Financial

More information

A Guide to Life Insurance Cover Creating your success through Financial Planning

A Guide to Life Insurance Cover Creating your success through Financial Planning & Guidance A Guide to Life Insurance Cover Contents How can I protect my family financially if I die? 02 What is life insurance? 03 What is a Financial Broker? 06 Why would I need to use a Financial Broker?

More information

Annuities - A Brief Guide

Annuities - A Brief Guide Verschoyle House 28/30 Lower Mount Street Dublin 2 Tel 01 613 1900 Fax 01 631 8602 Email info@pensionsboard.ie www.pensionsboard.ie The Pensions Board has prepared this booklet to help people understand

More information

RETIREMENT INCOME PLANS

RETIREMENT INCOME PLANS The formula for successful investing RETIREMENT INCOME PLANS PERFORMANCE PROTECTION EFFICIENCY CHOOSE YOUR FUNDS AND INCOME IN RETIREMENT OR BUY A GUARANTEED INCOME FOR LIFE Discovery Invest is an award

More information

Immediate Annuities. Reno J. Frazzitta Investment Advisor Representative 877-909-7233 www.thesmartmoneyguy.com

Immediate Annuities. Reno J. Frazzitta Investment Advisor Representative 877-909-7233 www.thesmartmoneyguy.com Reno J. Frazzitta Investment Advisor Representative 877-909-7233 www.thesmartmoneyguy.com Immediate Annuities Page 1 of 7, see disclaimer on final page Immediate Annuities What is an immediate annuity?

More information

Maximizing your Pension with Life Insurance

Maximizing your Pension with Life Insurance American Brokerage Services, Inc. 805 E Willow Grove Ave. Suite 2-B Wyndmoor, PA 1-888-227-3131 500 annuities1@absgo.com www.absgo.com Maximizing your Pension with Life Insurance Page 2 of 6 Maximizing

More information

Maximizing Your Pension with Life Insurance

Maximizing Your Pension with Life Insurance Maximizing Your Pension with Life Insurance Introduction If you participate in a traditional pension plan (known as a defined benefit plan) with your employer, you may receive monthly benefits from the

More information

Guide to Annuity Purchase

Guide to Annuity Purchase Fiducia Wealth Management Limited Guide to Annuity Purchase September 2012 For Professional Advisers Only Fiducia Wealth Management Ltd. Dedham Hall Business Centre, Brook Street, Colchester, Essex, CO7

More information

FINANCIAL ANALYSIS ****** UPDATED FOR 55% BENEFIT ****** ****** FOR ALL SURVIVORS ******

FINANCIAL ANALYSIS ****** UPDATED FOR 55% BENEFIT ****** ****** FOR ALL SURVIVORS ****** FINANCIAL ANALYSIS ****** UPDATED FOR 55% BENEFIT ****** ****** FOR ALL SURVIVORS ****** This fact sheet is designed to supplement the Department of Defense brochure: SBP SURVIVOR BENEFIT PLAN FOR THE

More information

Life Insurance Tutorial & Calculation Worksheet

Life Insurance Tutorial & Calculation Worksheet Life Insurance Tutorial & Calculation Worksheet Provided By NAVY MUTUAL AID ASSOCIATION Henderson Hall, 29 Carpenter Road, Arlington, VA 22212 Telephone 800-628-6011-703-614-1638 - FAX 703-945-1441 E-mail:

More information

Guide to Pension Annuities

Guide to Pension Annuities Guide to Pension Annuities Having successfully built up a pension fund during your working life, there will come a time when you will need to make some important decisions about how to use this fund. These

More information

MACQUARIE LIFETIME INCOME GUARANTEE POLICY

MACQUARIE LIFETIME INCOME GUARANTEE POLICY MACQUARIE LIFETIME INCOME GUARANTEE POLICY series 1: Product disclosure statement issued 8 march 2010 Important NOTICE This Product Disclosure Statement ( PDS ) is dated 8 March 2010 and together with

More information

25 Must Ask Annuity Questions

25 Must Ask Annuity Questions 25 Must Ask Annuity Questions When Can I Buy An Annuity? Who Is The Best Annuity Provider? Why Do I Need Advice? 1. What is an Annuity? If you have a private pension when you retire you can purchase an

More information

ADVISOR USE ONLY PAYOUT ANNUITY. Overcoming objections. Life s brighter under the sun

ADVISOR USE ONLY PAYOUT ANNUITY. Overcoming objections. Life s brighter under the sun ADVISOR USE ONLY PAYOUT ANNUITY Overcoming objections Life s brighter under the sun Overview Payout annuities are a powerful retirement tool and have been an important product for many years. They re sometimes

More information

A Guide to Retirement Options. Contents

A Guide to Retirement Options. Contents A Guide to Retirement Options Contents 2. Quick Guide 5. Lifetime Annuities (Secured Pension) 6. Single Life and Joint Life Annuities 6. Level and Escalating Lifetime Annuities 6. Impaired Life and Enhanced

More information

A guide to your retirement options

A guide to your retirement options A guide to your retirement options I have been looking forward to my retirement but now I am worried about making the right choice See your options page 4. Cathy has stood by me through the good times

More information

Buying a pension annuity

Buying a pension annuity Buying a pension annuity Why do I need to think about buying a pension annuity? When you come to retire, you will have some important decisions to make. Probably most important of all is how you will generate

More information

RETIREMENT PLANS PERFORMANCE PROTECTION EFFICIENCY

RETIREMENT PLANS PERFORMANCE PROTECTION EFFICIENCY RETIREMENT PLANS PERFORMANCE PROTECTION EFFICIENCY SAVE FOR RETIREMENT AND PROTECT YOUR INVESTMENT Invest is an award winning provider of investment products in South Africa and is part of the Group. Our

More information

OLD MUTUAL SUPERFUND RETIREMENT GUIDE

OLD MUTUAL SUPERFUND RETIREMENT GUIDE OLD MUTUAL SUPERFUND RETIREMENT GUIDE AS AN OLD MUTUAL SUPERFUND MEMBER, YOU NOW HAVE A NUMBER OF OPTIONS IF YOU LEAVE YOUR EMPLOYER DUE TO RETIREMENT. This guide is intended to help you: 1. Understand

More information

RE 7: Second Level Regulatory Examination: Long Term Insurance Category B, Long Term Insurance Category C And Retail Pension Funds

RE 7: Second Level Regulatory Examination: Long Term Insurance Category B, Long Term Insurance Category C And Retail Pension Funds COMPLIANCE MONITORING SYSTEMS CC RE 7: Second Level Regulatory Examination: Long Term Insurance Category B, Long Term Insurance Category C And Retail Pension Funds Alan Holton December 2009 All representatives

More information

YOUR GUIDE TO RETIREMENT

YOUR GUIDE TO RETIREMENT YOUR GUIDE TO RETIREMENT www.phoenixlife.co.uk CONTENTS Page Purpose of this guide 3 Your pension options - Buying your pension income (annuity) from us 4 Your pension options - Buying your pension income

More information

PERSONAL RETIREMENT SAVINGS ACCOUNTS PRODUCT INFORMATION

PERSONAL RETIREMENT SAVINGS ACCOUNTS PRODUCT INFORMATION ACTUARIAL STANDARD OF PRACTICE PRSA-2 PERSONAL RETIREMENT SAVINGS ACCOUNTS PRODUCT INFORMATION Classification Mandatory MEMBERS ARE REMINDED THAT THEY MUST ALWAYS COMPLY WITH THE CODE OF PROFESSIONAL CONDUCT

More information

MEMBERS Future Income Annuity

MEMBERS Future Income Annuity MEMBERS Future Income Annuity GUARANTEED INCOME FOR LIFE Move confidently into the future MFA-875346-034-046 A financial services company serving financial institutions and their clients worldwide. It

More information

Longevity risk. What do South African and UK retirement frameworks have in common??

Longevity risk. What do South African and UK retirement frameworks have in common?? Longevity risk Over the past 50 years life expectancy in the UK has increased by up to 10 years Longevity is the result of a complex interaction of various factors such as increased prosperity, changes

More information

Understanding Annuities: A Lesson in Annuities

Understanding Annuities: A Lesson in Annuities Understanding Annuities: A Lesson in Annuities Did you know that an annuity can be used to systematically accumulate money for retirement purposes, as well as to guarantee a retirement income that you

More information

Contents: What is an Annuity?

Contents: What is an Annuity? Contents: What is an Annuity? When might I need an annuity policy? Types of annuities Pension annuities Annuity income options Enhanced and Lifestyle annuities Impaired Life annuities Annuity rates FAQs

More information

Caution: Withdrawals made prior to age 59 ½ may be subject to a 10 percent federal penalty tax.

Caution: Withdrawals made prior to age 59 ½ may be subject to a 10 percent federal penalty tax. Annuity Distributions What are annuity distributions? How are annuity distributions made? How are your annuity payouts computed if you elect to annuitize? Who are the parties to an annuity contract? How

More information

THE MATHEMATICS OF LIFE INSURANCE THE NET SINGLE PREMIUM. - Investigate the component parts of the life insurance premium.

THE MATHEMATICS OF LIFE INSURANCE THE NET SINGLE PREMIUM. - Investigate the component parts of the life insurance premium. THE MATHEMATICS OF LIFE INSURANCE THE NET SINGLE PREMIUM CHAPTER OBJECTIVES - Discuss the importance of life insurance mathematics. - Investigate the component parts of the life insurance premium. - Demonstrate

More information

Excerpts from IRI Annuity Fact Book Variable Annuity 101 An annuity is often viewed as life insurance in reverse. Whereas life insurance protects an individual against premature death, an annuity protects

More information

Guaranteeing an Income for Life: An Immediate Income Annuity Review

Guaranteeing an Income for Life: An Immediate Income Annuity Review Guaranteeing an Income for Life: An Immediate Income Annuity Review The biggest financial risk that anyone faces during retirement is the risk that savings will be depleted...the risk that income will

More information

KEY FEATURES OF YOUR BUYOUT BOND ILLUSTRATION KEY FEATURES. and Conditions, available from your financial adviser.

KEY FEATURES OF YOUR BUYOUT BOND ILLUSTRATION KEY FEATURES. and Conditions, available from your financial adviser. 00000 Old Mutual Wealth Life Assurance Limited is a provider of long-term life assurance. It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential

More information

Life Assurance (Provision of Information) Regulations, 2001

Life Assurance (Provision of Information) Regulations, 2001 ACTUARIAL STANDARD OF PRACTICE LA-8 LIFE ASSURANCE PRODUCT INFORMATION Classification Mandatory MEMBERS ARE REMINDED THAT THEY MUST ALWAYS COMPLY WITH THE CODE OF PROFESSIONAL CONDUCT AND THAT ACTUARIAL

More information

DISCOVERY RETIREMENT OPTIMISER

DISCOVERY RETIREMENT OPTIMISER The formula for successful investing DISCOVERY RETIREMENT OPTIMISER PERFORMANCE PROTECTION EFFICIENCY MAXIMISE YOUR RETIREMENT SAVINGS USING YOUR LIFE PLAN Discovery Invest is an award winning provider

More information

HOW WE MANAGE THE PHOENIX LIFE LIMITED SPI WITH-PROFITS FUND

HOW WE MANAGE THE PHOENIX LIFE LIMITED SPI WITH-PROFITS FUND HOW WE MANAGE THE PHOENIX LIFE LIMITED SPI WITH-PROFITS FUND A guide for trustees with Simplified Pension Investment deposit administration policies invested in this fund The aims of this guide The guide

More information

Understanding Annuities: A Lesson in Indexed Annuities

Understanding Annuities: A Lesson in Indexed Annuities Understanding Annuities: A Lesson in Indexed Annuities Did you know that an annuity can be used to systematically accumulate money for retirement purposes, as well as to guarantee a retirement income that

More information

Personal Retirement Bond

Personal Retirement Bond Personal Retirement Bond Customer Guide This Customer Guide is to be read in conjunction with the Fund Guide. Introduction This guide applies to the Personal Retirement Bond. Zurich Life Assurance plc

More information

McGill University Pension Plan My Account Users Guide

McGill University Pension Plan My Account Users Guide McGill University Pension Plan My Account Users Guide Accessing your online pension account is easy. Simply follow these steps: Go to: www.mcgill.ca/pensions/access - click on My Account Sign in using

More information

Defined Contribution Pension Plan. Employee Brochure

Defined Contribution Pension Plan. Employee Brochure Defined Contribution Pension Plan Employee Brochure This brochure describes your Defined Contribution Pension Plan, the aim of which is to help you provide financially for your retirement. This plan is

More information

Annuities The Key to a

Annuities The Key to a Annuities The Key to a Secure Retirement 1 Saving for retirement is crucial, and making sure those resources last throughout your lifetime is just as important. Annuities do both helping you save, then

More information

Contents Introduction To Annuities Flexibility of Annuity Types of Annuity About Pensioncalculator.org

Contents Introduction To Annuities Flexibility of Annuity Types of Annuity About Pensioncalculator.org Annuities Guide Contents Introduction To Annuities What is an Annuity? Why Bother with an Annuity? Main Advantages of Annuities Pros and Cons Flexibility of Annuity Buying an annuity Tax & National Insurance

More information

Review of Annuity Market

Review of Annuity Market Review of Annuity Market Submission by the Society of Actuaries in Ireland February 2007 Introduction The Society of Actuaries in Ireland welcomes the opportunity to make this submission in relation to

More information

Guaranteeing an Income for Life: An Immediate Fixed Income Annuity Review

Guaranteeing an Income for Life: An Immediate Fixed Income Annuity Review Guaranteeing an Income for Life: An Immediate Fixed Income Annuity Review The biggest financial risk that anyone faces during retirement is the risk that savings will be depleted...the risk that income

More information

Annuities and decumulation phase of retirement. Chris Daykin UK Government Actuary Chairman, PBSS Section of IAA

Annuities and decumulation phase of retirement. Chris Daykin UK Government Actuary Chairman, PBSS Section of IAA Annuities and decumulation phase of retirement Chris Daykin UK Government Actuary Chairman, PBSS Section of IAA CASH LUMP SUM AT RETIREMENT CASH INSTEAD OF PENSION > popular with pension scheme members

More information

8th Bowles Symposium and 2nd International Longevity Risk and Capital Market Solutions Symposium

8th Bowles Symposium and 2nd International Longevity Risk and Capital Market Solutions Symposium 8th Bowles Symposium and 2nd International Longevity Risk and Capital Market Solutions Symposium Annuitization lessons from the UK Money-Back annuities and other developments Tom Boardman UK Policy Development

More information

Your Guide to Retirement Options

Your Guide to Retirement Options Your Guide to Retirement Options Contents Introduction 3 Overview 4 Personal Pension Plans/PRSAs 5 Defined Contribution Company Pension Plans 8 Additional Voluntary Contributions (AVCs) 11 Retirement

More information

Teachers Retirement Association. Marriage Dissolution: Dividing TRA Benefits

Teachers Retirement Association. Marriage Dissolution: Dividing TRA Benefits Teachers Retirement Association Marriage Dissolution: Dividing TRA Benefits Marriage Dissolution: Dividing TRA Benefits Preface This booklet is designed to give all parties involved in a marriage dissolution

More information

LIVING VERSUS GUARANTEED ANNUITIES: IN SEARCH OF A SUSTAINABLE RETIREMENT INCOME

LIVING VERSUS GUARANTEED ANNUITIES: IN SEARCH OF A SUSTAINABLE RETIREMENT INCOME LIVING VERSUS GUARANTEED ANNUITIES: IN SEARCH OF A SUSTAINABLE RETIREMENT INCOME By Mayur Lodhia and Johann Swanepoel Presented at the Actuarial Society of South Africa s 2012 Convention 16 17 October

More information

Challenger Retirement Income Research. How much super does a retiree really need to live comfortably? A comfortable standard of living

Challenger Retirement Income Research. How much super does a retiree really need to live comfortably? A comfortable standard of living 14 February 2012 Only for use by financial advisers How much super does a retiree really need to live comfortably? Understanding how much money will be needed is critical in planning for retirement One

More information

SHELL CONTRIBUTORY PENSION FUND. Additional Voluntary Contributions Arrangement Explanatory Book

SHELL CONTRIBUTORY PENSION FUND. Additional Voluntary Contributions Arrangement Explanatory Book SHELL CONTRIBUTORY PENSION FUND Additional Voluntary Contributions Arrangement Explanatory Book July 2013 CONTENTS 1 Introduction 3 2 What are AVCs? 7 Why pay AVCs? 10 How do AVCs work? 12 What options

More information

Should I Buy an Income Annuity?

Should I Buy an Income Annuity? Prepared For: Fred & Wilma FLINT Prepared By: Don Maycock The purchase of any financial product involves a trade off. For example when saving for retirement, you are often faced with making a trade off

More information

For expert advice call 01494 451441

For expert advice call 01494 451441 Protection Planning Life and Protection Insurance The cost of insurance, particularly life insurance has fallen over recent years, whilst the quality of cover has in many cases increased. With this in

More information

Using your AVC to protect your loved ones. Life Assurance

Using your AVC to protect your loved ones. Life Assurance Using your AVC to protect your loved ones Life Assurance > Of course, none of us want to die before we get to enjoy the freedom of retirement. But what if the worst did happen? You d want your loved ones

More information

COMMINSURE LIFETIME INCOME ANNUITY.

COMMINSURE LIFETIME INCOME ANNUITY. COMMINSURE LIFETIME INCOME ANNUITY. A retirement income solution now with a Death Benefit Guarantee. A CommInsure Lifetime Income Annuity now offers even more comfort, protection and value with a Death

More information

Using Life Insurance for Pension Maximization

Using Life Insurance for Pension Maximization Using Life Insurance for Pension Maximization Help your clients capitalize on their pension plans Agent Guide For agent use only. Not to be used for consumer solicitation purposes. Help Your Clients Obtain

More information

PHOENIX LIFE ASSURANCE LIMITED LONDON LIFE WITH-PROFITS FUND FORMER LONDON LIFE AMP (UK) WITH-PROFITS PENSION POLICIES

PHOENIX LIFE ASSURANCE LIMITED LONDON LIFE WITH-PROFITS FUND FORMER LONDON LIFE AMP (UK) WITH-PROFITS PENSION POLICIES With-profits policy performance your questions answered January 2015 PHOENIX LIFE ASSURANCE LIMITED LONDON LIFE WITH-PROFITS FUND FORMER LONDON LIFE AMP (UK) WITH-PROFITS PENSION POLICIES The aim of this

More information

INSTITUTE AND FACULTY OF ACTUARIES EXAMINATION

INSTITUTE AND FACULTY OF ACTUARIES EXAMINATION INSTITUTE AND FACULTY OF ACTUARIES EXAMINATION 27 April 2015 (pm) Subject CT5 Contingencies Core Technical Time allowed: Three hours INSTRUCTIONS TO THE CANDIDATE 1. Enter all the candidate and examination

More information

Should I Buy an Income Annuity?

Should I Buy an Income Annuity? Prepared For: Valued Client Prepared By: CPS The purchase of any financial product involves a trade off. For example when saving for retirement, you are often faced with making a trade off between how

More information

RETIREMENT PLANS. Save over the long term to ensure financial independence

RETIREMENT PLANS. Save over the long term to ensure financial independence Save over the long term to ensure financial independence RETIREMENT PLANS Discovery Invest is an award winning provider of products in South Africa and is part of the Discovery Group. Our offering is comprehensive

More information

Life Insurance and Annuity Buyer s Guide

Life Insurance and Annuity Buyer s Guide Life Insurance and Annuity Buyer s Guide Published by the Kentucky Office of Insurance Introduction The Kentucky Office of Insurance is pleased to offer this Life Insurance and Annuity Buyer s Guide as

More information

Personal Pensions. Freedom in Retirement Plan Personal & Personal (Rebate) Single Contribution Pension Plan Personal Customer Guide

Personal Pensions. Freedom in Retirement Plan Personal & Personal (Rebate) Single Contribution Pension Plan Personal Customer Guide Personal Pensions Freedom in Retirement Plan Personal & Personal (Rebate) Single Contribution Pension Plan Personal Customer Guide This Customer Guide is to be read in conjunction with the Fund Guide.

More information

Extending Retirement Assets: A Stretch IRA Review

Extending Retirement Assets: A Stretch IRA Review Extending Retirement Assets: A Stretch IRA Review Are you interested in the possibility of using the funds in your traditional IRA to provide income to one or more generations of family members? Table

More information

Retirement Income Investment Strategy by Andrew J. Krosnowski

Retirement Income Investment Strategy by Andrew J. Krosnowski Retirement Income Investment Strategy by Andrew J. Krosnowski Step 1- Income Needs-When formulating a successful strategy to generate income during retirement we feel that it is important to start by identifying

More information

Annuities Guide. Simply Retirement make it easy for you to find the best deal in retirement. Simply Retirement Ltd who are we? Who is this guide for?

Annuities Guide. Simply Retirement make it easy for you to find the best deal in retirement. Simply Retirement Ltd who are we? Who is this guide for? Simply Retirement make it easy for you to find the best deal in retirement Jan Leeming Annuities Guide Simply Retirement Ltd who are we? Thank you for requesting this annuity guide. I would just like to

More information

HOW WE MANAGE THE PHOENIX LIFE LIMITED PHOENIX WITH-PROFITS FUND

HOW WE MANAGE THE PHOENIX LIFE LIMITED PHOENIX WITH-PROFITS FUND HOW WE MANAGE THE PHOENIX LIFE LIMITED PHOENIX WITH-PROFITS FUND A guide for policyholders with unitised with-profits policies (except for Profit Plus Fund policies) invested in this fund The aims of this

More information

The Fiducia Guide to Retirement Planning

The Fiducia Guide to Retirement Planning The Fiducia Guide to Retirement Planning September 2012 Fiducia Wealth Management Limited Dedham Hall Business Centre, Brook Street Colchester, Essex, CO7 6AD Fiducia Wealth Management Limited is authorised

More information

Heriot-Watt University. BSc in Actuarial Mathematics and Statistics. Life Insurance Mathematics I. Extra Problems: Multiple Choice

Heriot-Watt University. BSc in Actuarial Mathematics and Statistics. Life Insurance Mathematics I. Extra Problems: Multiple Choice Heriot-Watt University BSc in Actuarial Mathematics and Statistics Life Insurance Mathematics I Extra Problems: Multiple Choice These problems have been taken from Faculty and Institute of Actuaries exams.

More information

Pension Annuity. Key Features

Pension Annuity. Key Features Helping you decide The Financial Services Authority is the independent financial services regulator. It requires us to give you this important information to help you to decide whether our Pension Annuity

More information

Eagle Star Personal Pensions & Associated Policies

Eagle Star Personal Pensions & Associated Policies Eagle Star Personal Pensions & Associated Policies Freedom in Retirement Plan - Personal & Personal (Rebate) Single Contribution Pension Plan - Personal & Income Protection Plan Customer Guide Introduction

More information

KEY FEATurES of LEGAL & GEnErAL S PEnSIon AnnuITIES.

KEY FEATurES of LEGAL & GEnErAL S PEnSIon AnnuITIES. PEnSIon AnnuITIES KEY FEATurES of LEGAL & GEnErAL S PEnSIon AnnuITIES. Helping you make the right decisions for your future INsuRANCe. savings. INVesTMeNT MANAGeMeNT. 01 Key features of Legal & General

More information

Your retirement income. Exploring your options

Your retirement income. Exploring your options Your retirement income Exploring your options Contents 02 What do you want to do with your pension fund? 07 A regular retirement income for the rest of your life 10 A flexible income from a Self Invested

More information

What to Consider When Faced With the Pension Election Decision

What to Consider When Faced With the Pension Election Decision PENSION ELECTION Key Information About Your Pension (Optional Forms of Benefits) Pension Math and Factors to Consider Pension Maximization What Happens if Your Company Files for Bankruptcy and Your Company

More information

An Adviser s Guide to Pensions

An Adviser s Guide to Pensions An Adviser s Guide to Pensions 1 An Adviser s Guide to Pensions Contents: Section 1: Personal Pensions 1.1 Eligibility 1.2 Maximum Benefits 1.3 Contributions & Tax Relief 1.4 Death Benefits 1.5 Retirement

More information

Pay-on-delivery investing. Evolve Investment Range

Pay-on-delivery investing. Evolve Investment Range Pay-on-delivery investing Evolve Investment Range 1 EVOLVE INVESTMENT RANGE EVOLVE INVESTMENT RANGE 2 Picture a world where you only pay a company once they have delivered. Imagine striking oil first,

More information

Basic Guide to Retirement Income Options

Basic Guide to Retirement Income Options Basic Guide to Retirement Income Options Can I afford to retire? Which retirement income solution is best for me? Should I take all my tax-free cash entitlement? Will my family benefit from my pension

More information

Annuity PENSIONS INVESTMENTS PROTECTION

Annuity PENSIONS INVESTMENTS PROTECTION Annuity About Canada Life Established in 1903, the Canada Life Group has grown to be a modern and dynamic international financial services business. We are part of Great-West Life, one of the world s leading

More information

Variable Annuities. Reno J. Frazzitta Investment Advisor Representative 877-909-7233 www.thesmartmoneyguy.com

Variable Annuities. Reno J. Frazzitta Investment Advisor Representative 877-909-7233 www.thesmartmoneyguy.com Reno J. Frazzitta Investment Advisor Representative 877-909-7233 www.thesmartmoneyguy.com Variable Annuities Page 1 of 8, see disclaimer on final page Variable Annuities What is a variable annuity? Investor

More information

Conventional Lifetime Annuity Options Your Questions Answered

Conventional Lifetime Annuity Options Your Questions Answered Conventional Lifetime Annuity Options Your Questions Answered 0845 077 7077 (8.30am-6pm weekdays) Calls may be recorded for training and monitoring purposes. www.425fs.co.uk Contents 1. Introduction to

More information

Annuities. Introduction 2. What is an Annuity?... 2. How do they work?... 3. Types of Annuities... 4. Fixed vs. Variable annuities...

Annuities. Introduction 2. What is an Annuity?... 2. How do they work?... 3. Types of Annuities... 4. Fixed vs. Variable annuities... An Insider s Guide to Annuities Whatever your picture of retirement, the best way to get there and enjoy it once you ve arrived is with a focused, thoughtful plan. Introduction 2 What is an Annuity?...

More information

Conventional Lifetime Annuity Options Your Questions Answered

Conventional Lifetime Annuity Options Your Questions Answered Conventional Lifetime Annuity Options Your Questions Answered 0800 014 7470 0333 014 6267 am-5.30pm weekdays. Calls may be recorded for training and monitoring purposes. www.425fs.co.uk Contents 1. Introduction

More information

The Insured Annuity Strategy. What would you do in retirement if you knew your income was guaranteed for life?

The Insured Annuity Strategy. What would you do in retirement if you knew your income was guaranteed for life? The Insured Annuity Strategy What would you do in retirement if you knew your income was guaranteed for life? Enjoy the retirement you want to live. You re working hard to save for your retirement. Yet

More information

For advisor use only Advisor Guide

For advisor use only Advisor Guide For advisor use only Advisor Guide RBC Payout Annuities 2 RBC Payout Annuities: Advisor guide What you and your clients need to know about payout annuities In an uncertain financial world where guarantees

More information

Retirement from the SAMRO RETIREMENT ANNUITY FUND

Retirement from the SAMRO RETIREMENT ANNUITY FUND Retirement from the SAMRO RETIREMENT ANNUITY FUND The Samro Retirement Annuity Fund provides benefits for members who elect to retire from the Fund. The aim of this document is to provide members with

More information

FINANCIAL SERVICES BOARD COLLECTIVE INVESTMENT SCHEMES

FINANCIAL SERVICES BOARD COLLECTIVE INVESTMENT SCHEMES FINANCIAL SERVICES BOARD COLLECTIVE INVESTMENT SCHEMES INTRODUCTION This booklet will provide you with information on the importance of understanding ways in which Collective Investment Schemes ( CIS )

More information

Protecting your lifestyle and your wealth

Protecting your lifestyle and your wealth Protecting your lifestyle and your wealth Life assurance Critical illness cover Income protection Key person and partnership protection Over 30 years experience providing independent pension advice to

More information

Personal Pension Account

Personal Pension Account Personal Pension Account Contents Introduction... 1 A Closer Look At Our Personal Pension Account... 2 What Are The Tax Advantages?... 3 Flexible Contribution Options... 4 You Control Your Investment...

More information

Wealth Transfer Planning in a Low Interest Rate Environment

Wealth Transfer Planning in a Low Interest Rate Environment Wealth Transfer Planning in a Low Interest Rate Environment MLINY0508088997 1 of 44 Did You Know 1/3 of affluent households over the age of 50 do not have an estate plan in place 31% of households with

More information

Understanding Superannuation

Understanding Superannuation Understanding Superannuation Client Fact Sheet July 2012 Superannuation is an investment vehicle designed to assist Australians save for retirement. The Federal Government encourages saving through superannuation

More information

Contents. Meeting the Costs of Live at Home Care & Nursing Funding Options Handbook. Funding Options 2. Private Funding 3

Contents. Meeting the Costs of Live at Home Care & Nursing Funding Options Handbook. Funding Options 2. Private Funding 3 Meeting the Costs of Live at Home Care & Nursing Funding Options Handbook Contents Funding Options 2 Private Funding 3 Equity Release Schemes Home Reversion Plans 3 Full Reversion Plans 4 Partial Reversion

More information

Key Features of the Lifetime Annuity

Key Features of the Lifetime Annuity from the Select Portfolio This is an important document which you should keep along with your personalised Illustration. S E L E C T Alico is a leading international life insurer with a unique heritage

More information