Annuities in Pension Plans: Dr David Blake

Size: px
Start display at page:

Download "Annuities in Pension Plans: Dr David Blake"

Transcription

1 Annuities in Pension Plans: Dr David Blake Director Pensions Institute, U.K. The World Bank, Annuities Workshop 7-8 June 1999

2 Purpose of Pension Plan To provide retirement income security for remaining life To eliminate the risk that the pensioner outlives his/her resources

3 Definition of life annuity Financial contract that provides regular income to purchaser for their remaining life

4 Types of Annuities Level annuity. Escalating annuity Index-linked annuity Limited price indexed (LPI) annuity With-profit and Unit-linked (or variable) annuity

5 Alternatives to Annuities Lump sum: accumulated fund goes to pensioner on retirement State provision: on pay-as-you-go basis

6 Alternatives to Annuities (2) Income drawdown (managed annuity or pension): Capital sum remains invested and individuals draw income from fund of between 35% and 100% of single-life level annuity

7 Alternatives to Annuities (3) Until age 75 when a standard annuity must be purchased On death (before annuity drawn), the balance of the fund as lump sum

8 Problems that must be dealt with Should pensioners be obliged to purchase annuities or should they have some other choice?

9 Effectiveness of Provision Thin market: only 10 of around 240 authorized life companies in the U.K are serious providers of life annuities. How efficient will be the provision of the alternatives to annuities?

10 Adverse Selection and Mortality Risk Only those who believe that they are likely to live longer than average voluntarily purchase annuities To hedge, the insurance company will base its annuity rates on the select group that is most likely to purchase annuities. Why?

11 Adverse Selection and Mortality Risk (2) Because difficult to differentiate between prospective purchasers who will experience heavier mortality (and so make a profit for the insurance company) and those who will experience lighter mortality (and hence make a loss for the insurance company).

12 Adverse Selection and Mortality Risk (3) Annuities poor value for money for members of the first group. Underestimating mortality improvements Mortality forecast errors of up to 20% over intervals as short as 10 years are not uncommon.

13 Adverse Selection and Mortality Risk (4) U.K. insurance companies underestimate average life expectancy of their pool of annuitants by up to two years Insurance companies add substantial cost loadings to cover these risks (12%)

14 Inflation Risk Unanticipated high inflation rapidly reduces the real value of the pension

15 Interest Rate Risk Annuity rates vary substantially over the interest rate cycle. Related to yields on government bonds of the same expected term which vary by up to 150% over the cycle.

16 Problems With Alternatives to Annuities Lump sum: Pensioner now bears mortality risk Moral hazard of spending lump sum too quickly and then going back to state for help. State provision: Demographic timebomb

17 Problems With Alternatives to Annuities (2) Income Drawdown: Annuity rates might actually be lower when annuity purchased Investment performance during deferral period might be poor so fund falls in value

18 Problems With Alternatives to Annuities (3) Income Drawdown: Individuals forego mortality crosssubsidy which is cumulative over time By delaying purchase of an annuity, individuals experience a so-called mortality drag

19 How Are the Problems With Annuities Currently Managed? Insurance companies use government bond market to protect against both interest rate and inflation risk arising after the annuity is purchased Annuitants themselves remain exposed to interest and inflation risk

20 How Are the Problems With Annuities Currently Managed? (2) If DC scheme member retires during an interest rate trough (as happened in the mid 1990s in the U.K., for example), he or she can end up with low pension

21 How Are the Problems With Annuities Currently Managed? (3) Similarly, if 65-year male chooses indexed annuity, he receives initial cash sum about 30% lower than level annuity With inflation at 3% p.a., it takes 11 years for the indexed annuity to exceed the level annuity

22 How Are the Problems With Annuities Currently Managed? (4) and 19 years before the total cash payments are equalized Most people take level annuity and retain the inflation risk

23 Outcome Insurance companies use financial markets to hedge interest and inflation risks that they face from purchase date Interest rate risk up until this date borne by future annuitant, and inflation risk after retirement date borne by level annuitant.

24 Outcome (2) Mortality risk and risk of underestimating improvements in mortality shared: insurance companies claim to lose money on annuity business.

25 Can Mandatory Annuities Help? Main causes of private market failure in annuity provision: adverse selection and mortality risk. Mandatory annuities would help remove adverse selection bias in demand for annuities.

26 Can Survivor Bonds Help? Survivor bonds: coupons linked to realized mortality Removes risk from underestimating mortality improvements Insurance company bears no aggregate mortality risk and cost loadings fall.

27 Can Mandated Providers Help? How many annuity providers? State As Monopoly Provider Small Group Of Competing Specially Licensed Providers

28 State As Monopoly Provider Advantages: Substantial economies of scale in provision of annuities lowers unit costs of providing annuities State bears large aggregate risks relating to mortality and mortality improvements that private insurance companies dislike bearing

29 State As Monopoly Provider (2) Advantages: State would, in effect, be issuing survivor bonds and the purchase of these would help to fund the national debt State could also assume interest rate risk by offering smoothed annuities, i.e., annuities that are smoothed across the interest rate cycle.

30 State As Monopoly Provider (3) Disadvantages: Few examples anywhere in the world of state organizations run on commercial lines that are efficient

31 Small Group Of Competing Specially Licensed Providers Advantages: Allows private sector to offer annuities and also permit each provider to gain sufficient market share to justify entry to the market Efficiency results from competition between the providers

32 Small Group Of Competing Specially Licensed Providers (2) Disadvantages: Danger of collusion Danger of wasteful rather than efficiency-enhancing competition: e.g., costly marketing campaigns to attract new customers.

33 Small Group Of Competing Solution: Specially Licensed Providers (3) Avoid collusion by artificial segmentation of market. Government helps these companies keep costs down with indexed and survivor bonds

34 Other Issues Should organizations selling annuities be restricted solely to sale of annuities or should they be permitted to sell other life assurance products as well? If the domestic annuity market is small and poorly developed, should foreign annuity providers enter the market?

35 Other Issues (2) But paucity of accurate mortality data in such countries? Should the annuity investments be held in domestic assets only or should international investments be permitted? What about the associated currency risk?

36 Conclusion Simple answer to: is there an alternative to annuities? No Real issues: what type of annuities and who provides them?

37 Conclusion (2) Four tier structure to pension provision Indexed linked annuity tier Level annuity tier Variable annuity tier Lump sum or drawdown

38 Conclusion (3) Inevitable Role for the State: Annuities cannot exist without the state being either a monopoly provider or providing financial instruments that enable the private sector to purchase matching assets against their liabilities

39 Conclusion (4) Inevitable Role for the State: State must establish institutional framework for the pension annuity business that offers the appropriate incentives for annuity providers to compete effectively and economically

40 Conclusion (5) Inevitable Role for the State: Requires mandatory pension annuities, since this would help to reduce costs associated with both adverse selection and the marketing of voluntary arrangements

41 Conclusion (6) Annuities a shared responsibility between public and private sectors: Greater reliability of mortality data Greater inventiveness by financial system

42 Conclusion (7) In small, developing countries with inadequate mortality data and unsophisticated financial system, state may have to provide annuities directly or it has to kick-start private annuity market with indexed and survivor bonds

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

INTRODUCTION. DONALD DUVAL Director of Research AON Consulting, United Kingdom

INTRODUCTION. DONALD DUVAL Director of Research AON Consulting, United Kingdom DONALD DUVAL Director of Research AON Consulting, United Kingdom INTRODUCTION I have a rather narrower subject matter than David and inevitably some of what I am going to say actually goes over the grounds

More information

DISCUSSION PAPER PI-9907

DISCUSSION PAPER PI-9907 DISCUSSION PAPER PI-9907 Annuity Markets: Problems and Solutions David Blake July 1999 ISSN 1367-580X The Pensions Institute Cass Business School City University 106 Bunhill Row London EC1Y 8TZ UNITED

More information

Valuation Report on Prudential Annuities Limited as at 31 December 2003. The investigation relates to 31 December 2003.

Valuation Report on Prudential Annuities Limited as at 31 December 2003. The investigation relates to 31 December 2003. PRUDENTIAL ANNUITIES LIMITED Returns for the year ended 31 December 2003 SCHEDULE 4 Valuation Report on Prudential Annuities Limited as at 31 December 2003 1. Date of investigation The investigation relates

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

Longevity Risk Management and the Development of a Life Annuity Market in Australia

Longevity Risk Management and the Development of a Life Annuity Market in Australia www.business.unsw.edu.au The University of New South Wales Australian School of Business Australian School of Business Research Paper No. 2010ACTL01 Longevity Risk Management and the Development of a Life

More information

Longevity risk and life annuity challenges around the world

Longevity risk and life annuity challenges around the world Longevity risk and life annuity challenges around the world Professor David Blake d.blake@city.ac.uk www.pensions-institute.org Santiago, Chile March 2013 1 Agenda Longevity and other retirement risks

More information

Developments in Pension and Annuity Markets. Ian Tonks

Developments in Pension and Annuity Markets. Ian Tonks Developments in Pension and Annuity Markets Ian Tonks Outline Pensions policy and annuity markets in an ageing world DC pensions: auto-enrolment in UK from 2012 Structure of annuity markets in UK Types

More information

Understanding Annuities: A Lesson in Variable Annuities

Understanding Annuities: A Lesson in Variable Annuities Understanding Annuities: A Lesson in Variable 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

More information

Options and Challenges for the Payout Phase

Options and Challenges for the Payout Phase Options and Challenges for the Payout Phase 4 th Contractual Saving Conference Washington DC, April 2-4, 2008 Pablo Antolin DAF/FIN OECD, Private Pension Unit OECD project: Payout Phase and Annuities Policy

More information

Options available when deciding to take pension benefits

Options available when deciding to take pension benefits Options available when deciding to take pension benefits You can now use the money that has built up in your pension fund to provide you with an income in retirement. An income can be provided in any of

More information

Drawdown Will Eventually Replace Annuities

Drawdown Will Eventually Replace Annuities Drawdown Will Eventually Replace Annuities Tom Boardman The Gordon Midgley Memorial Debate 2008 1 Annuitisation Puts capital at risk in exchange for receiving a mortality cross-subsidy Does not have to

More information

Understanding Annuities: A Lesson in Fixed Interest and Indexed Annuities Prepared for: Your Clients

Understanding Annuities: A Lesson in Fixed Interest and Indexed Annuities Prepared for: Your Clients Understanding Annuities: A Lesson in Fixed Interest and Indexed Annuities Prepared for: Your Clients Presented by: Arvin D. Pfefer Arvin D. Pfefer & Associates 7301 Mission Road, Suite 241 Prairie Village,

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

Longevity insurance annuities are deferred annuities that. Longevity Insurance Annuities in 401(k) Plans and IRAs. article Retirement

Longevity insurance annuities are deferred annuities that. Longevity Insurance Annuities in 401(k) Plans and IRAs. article Retirement article Retirement Longevity Insurance Annuities in 401(k) Plans and IRAs What role should longevity insurance annuities play in 401(k) plans? This article addresses the question of whether participants,

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

Retirement Payouts and Risks Involved

Retirement Payouts and Risks Involved Retirement Payouts and Risks Involved IOPS OECD Global Forum, Beijing, 14-15 November 2007 Financial Affairs Division, OECD 1 Structure Different types of payout options Lump-sum (pros and cons) Programmed

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

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

Annuitization lessons from the UK

Annuitization lessons from the UK IMF Seminar on Ageing, Financial Risk Management and Financial Stability The views expressed in this paper are those of the author(s) only, and the presence of them, or of links to them, on the IMF website

More information

Improving Security and Flexibility in Retirement: Full Technical Report. Retirement Income Working Party London

Improving Security and Flexibility in Retirement: Full Technical Report. Retirement Income Working Party London Improving Security and Flexibility in Retirement: Full Technical Report Retirement Income Working Party London Prepared by David Blake and Robert Hudson March 2000 Copies of the full technical report can

More information

Longevity risk hedging: The role of the private & public sectors

Longevity risk hedging: The role of the private & public sectors Longevity risk hedging: The role of the private & public sectors Professor David Blake Director Pensions Institute Cass Business School d.blake@city.ac.uk November 2008 1 Issues Quantifying longevity risk

More information

The Economics of Annuities

The Economics of Annuities The Geneva Papers on Risk and Insurance Vol. 29 No. 1 (January 2004) 115 127 The Economics of Annuities by Richard Taylor 1. Introduction The challenges of an ageing global population are among the most

More information

billion, while annuity reserves (Table 8.2) increased 6 percent to $2.5 trillion.

billion, while annuity reserves (Table 8.2) increased 6 percent to $2.5 trillion. 8annuities Annuities are financial contracts that pay a steady stream of income for either a fixed period of time or for the lifetime of the annuity owner (the annuitant). Most pension and retirement plan

More information

Personal Lifestyle Strategy 2015 Review

Personal Lifestyle Strategy 2015 Review S INVESTMENTS LIFE INSURANCE Personal Lifestyle Strategy 2015 Review november 2015 Audience: Brokers and Financial Consultants We launched our Personal Lifestyle Strategy (PLS) in 2010. In order to ensure

More information

National specific template Log NS.09 best estimate assumptions for life insurance risks

National specific template Log NS.09 best estimate assumptions for life insurance risks National specific template Log NS.09 best estimate assumptions for life insurance risks CELL(S) ITEM INSTRUCTIONS N/A General Comment This template is applicable to life insurers and life reinsurers. The

More information

FLEXIBLE LIFETIME ANNUITY NATIONAL INSURANCE NUMBER POLICY NUMBER

FLEXIBLE LIFETIME ANNUITY NATIONAL INSURANCE NUMBER POLICY NUMBER FLEXIBLE LIFETIME ANNUITY NATIONAL INSURANCE NUMBER POLICY NUMBER 1 THE PRUDENTIAL ASSURANCE COMPANY LIMITED Incorporated in England Reg'd No. 15454 Registered Office: Laurence Pountney Hill, London, EC4R

More information

Annuities in Sweden: Risksharing. Provider. Edward Palmer Uppsala University & Swedish Social Insurance Agency

Annuities in Sweden: Risksharing. Provider. Edward Palmer Uppsala University & Swedish Social Insurance Agency Annuities in Sweden: Risksharing with a Monopoly Provider Edward Palmer Uppsala University & Swedish Social Insurance Agency Overview of the Presentation Pension Landscape in Sweden The Public FDC Scheme

More information

Key Features Document

Key Features Document Keyfacts Key Features Document Transact Section 32 Buy Out Bond IntegraLife UK Limited A firm authorised and by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and

More information

Actuarial Risk Management

Actuarial Risk Management ARA syllabus Actuarial Risk Management Aim: To provide the technical skills to apply the principles and methodologies studied under actuarial technical subjects for the identification, quantification and

More information

Annuity Principles and Concepts Session Five Lesson Two. Annuity (Benefit) Payment Options

Annuity Principles and Concepts Session Five Lesson Two. Annuity (Benefit) Payment Options Annuity Principles and Concepts Session Five Lesson Two Annuity (Benefit) Payment Options Life Contingency Options - How Income Payments Can Be Made To The Annuitant. Pure Life versus Life with Guaranteed

More information

THE EQUITABLE LIFE ASSURANCE SOCIETY

THE EQUITABLE LIFE ASSURANCE SOCIETY Annual FSA Insurance Returns for the year ended 31 December 2004 Appendices 9.1, 9.3, 9.4 & 9.6 from the Interim Prudential Sourcebook for Insurers Registered Office 20-22 Bedford Row, London, WC1R 4JS

More information

Turning your account into a retirement income. BASF UK Group Pension Scheme

Turning your account into a retirement income. BASF UK Group Pension Scheme Turning your account into a retirement income BASF UK Group Pension Scheme November 2008 Helping you decide As you approach retirement, you will need to make some important decisions about the type of

More information

Ph. 917122805147/Mob. 919766863319

Ph. 917122805147/Mob. 919766863319 Prof. D N Panigrahi Student Member of IAI (Id: 4531) Associate Professor, Institute of Management Technology Nagpur Email: dnpanigrahi@imtnag.ac.in; dnpanigrahi@gmail.com Ph. 917122805147/Mob. 919766863319

More information

Options available to members on leaving their retirement fund

Options available to members on leaving their retirement fund Options available to members on leaving their retirement fund Applicable to members leaving post March 2009 The contents of this document This document explains the different options you have available

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

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

Buyer s Guide for Deferred Annuities Fixed. Table of Contents

Buyer s Guide for Deferred Annuities Fixed. Table of Contents Buyer s Guide for Deferred Annuities Fixed Table of Contents What Is an Annuity?...2 When Annuities Start to Make Income Payments... 2 How Deferred Annuities Are Alike... 2 How Deferred Annuities Are Different...

More information

Subject CA1 Paper 2 April 2010 Question 6

Subject CA1 Paper 2 April 2010 Question 6 ActEd Acronym App Question 1 Page 1 Subject CA1 Paper 2 April 2010 Question 6 Question An insurance company has been selling term assurance and annuities for over 25 years. Discuss the features of the

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

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

Standard Life announced a review of its UK with-profits bonus rates on 28 January 2016.

Standard Life announced a review of its UK with-profits bonus rates on 28 January 2016. Standard Life Assurance Limited With-profits bonus declaration 28 January 2016 Standard Life announced a review of its UK with-profits bonus rates on 28 January 2016. Most customers will have a seen a

More information

Risk management for long-term guaranteed annuity products. Investment risk. Keywords: longevity risk, ageing, retirement, annuity, regulation.

Risk management for long-term guaranteed annuity products. Investment risk. Keywords: longevity risk, ageing, retirement, annuity, regulation. Keywords: longevity risk, ageing, retirement, annuity, regulation. THE DEVELOPMENT OF A LIFE ANNUITY MARKET IN AUSTRALIA: AN ANALYSIS OF SUPPLIER RISKS AND THEIR MITIGATION The significant accumulation

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

The Individual Annuity

The Individual Annuity The Individual Annuity a resource in your retirement an age of Decision Retirement today requires more planning than for previous generations. Americans are living longer many will live 20 to 30 years

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

The Cypriot Pension System: Adequacy and Sustainability

The Cypriot Pension System: Adequacy and Sustainability Cyprus Economic Policy Review, Vol. 6, No. 2, pp. 49-58 (2012) 1450-4561 49 The Cypriot Pension System: Adequacy and Sustainability Philippos Mannaris Aon Hewitt Abstract The fundamental objective of pension

More information

Pension Liability Risks: Manage or Sell?

Pension Liability Risks: Manage or Sell? Pension Liability Risks: Manage or Sell? David Blake Pensions Institute Cass Business School The views expressed in this paper are those of the author(s) only, and the presence of them, or of links to

More information

Freedom and Choice in Pensions. Your guide to the changes

Freedom and Choice in Pensions. Your guide to the changes Freedom and Choice in Pensions Your guide to the changes Contents Freedom and Choice 3-5 in Pensions Buy an annuity 6-7 Remain invested - 8-9 entering drawdown Take a cash lump sum 10 Will providers offer

More information

Policy Issues for Developing Annuities Markets

Policy Issues for Developing Annuities Markets Please cite this paper as: Stewart, F. (2007), "Policy Issues for Developing Annuities Markets", OECD Working Papers on Insurance and Private Pensions, No. 2, OECD Publishing. doi:10.1787/268701821137

More information

RISK SHARING IN EMPLOYER RETIREMENT PROVISION IN INDIA. By Bob Charles, F.I.A., Affiliate member of ASI

RISK SHARING IN EMPLOYER RETIREMENT PROVISION IN INDIA. By Bob Charles, F.I.A., Affiliate member of ASI RISK SHARING IN EMPLOYER RETIREMENT PROVISION IN INDIA By Bob Charles, F.I.A., Affiliate member of ASI 1 SUMMARY 1.1 Most types of traditional defined benefit employer retirement benefit scheme involve

More information

Note: The paid up value would be payable only on due maturity of the policy.

Note: The paid up value would be payable only on due maturity of the policy. Section II Question 6 The earning member of a family aged 35 years expects to earn till next 25 years. He expects an annual growth of 8% in his existing net income of Rs. 5 lakh p.a. If he considers an

More information

Recent Developments in Individual Life Annuity Markets and Products

Recent Developments in Individual Life Annuity Markets and Products Recent Developments in Individual Life Annuity Markets and Products Presentation by Mark J. Warshawsky Director, Retirement Research, Watson Wyatt Worldwide For a Conference on Global Aging and Financial

More information

Principal Income Protector SM Helping Maximize Income for Life

Principal Income Protector SM Helping Maximize Income for Life Principal Income Protector SM Helping Maximize Income for Life W E U N D E R S T A N D W H A T Y O U R E W O R K I N G F O R. What does retirement mean to you? Retirement means something different to each

More information

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

Your guide to UK pension transfers

Your guide to UK pension transfers Your guide to UK pension transfers If you ve worked in the UK at some stage of your career you ve possibly built up a fund in a UK pension. Now that you re back living in Ireland you may wish to bring

More information

NAIC Buyer s Guide for Deferred Annuities

NAIC Buyer s Guide for Deferred Annuities NAIC Buyer s Guide for Deferred Annuities Prepared by the National Association of Insurance Commissioners The National Association of Insurance Commissioners is an association of state insurance regulatory

More information

Your Retirement Income Options. TIAA-CREF Financial Essentials

Your Retirement Income Options. TIAA-CREF Financial Essentials Your Retirement Income Options TIAA-CREF Financial Essentials Today we will discuss: 1. Determining your retirement income needs Income sources Covering your expenses 2. Threats to your retirement cash

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

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

ISSUES IN THE REGULATION OF ANNUITIES MARKETS

ISSUES IN THE REGULATION OF ANNUITIES MARKETS ISSUES IN THE REGULATION OF ANNUITIES MARKETS E Philip Davis Brunel University West London e_philip_davis@msn.com www.geocities.com/e_philip_davis groups.yahoo.com/group/financial_stability Abstract Annuities

More information

Reforming Private DB Plans

Reforming Private DB Plans Reforming Private DB Plans November 2006 Colin Pugh, FCIA 1 Agenda Plan design reform (main topic). DB actuarial funding methodology. DB actuarial funding requirements. DB pension fund investments }one

More information

Pension benefits with a guarantee and the advice requirement

Pension benefits with a guarantee and the advice requirement Pension benefits with a guarantee and the advice requirement January 2016 This factsheet is intended to help pension scheme providers determine: whether certain types of pension benefits which contain

More information

Civil Service Retirement System Reform in Taiwan- Viewpoint from Public Service Pension Fund Operation

Civil Service Retirement System Reform in Taiwan- Viewpoint from Public Service Pension Fund Operation Civil Service Retirement System Reform in Taiwan- Viewpoint from Public Service Pension Fund Operation Presented by Chang, Che-Shen Minister, Ministry of Civil Service April 24, 2012 1 Agenda 1 Introduction

More information

Investment Strategy for Pensions Actuaries A Multi Asset Class Approach

Investment Strategy for Pensions Actuaries A Multi Asset Class Approach Investment Strategy for Pensions Actuaries A Multi Asset Class Approach 16 January 2007 Representing Schroders: Neil Walton Head of Strategic Solutions Tel: 020 7658 2486 Email: Neil.Walton@Schroders.com

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

NEST The Future of Retirement

NEST The Future of Retirement NEST The Future of Retirement Submission from J.P. Morgan Asset Management Consultation questions 1. How will the trend for changing retirement patterns and provision affect what: a. members need, and

More information

Buyer s Guide for Deferred Annuities. Table of Contents

Buyer s Guide for Deferred Annuities. Table of Contents Buyer s Guide for Deferred Annuities Table of Contents What Is an Annuity?... 1 When Annuities Start to Make Income Payments... 1 How Deferred Annuities Are Alike... 1 How Deferred Annuities Are Different...

More information

The Individual Annuity

The Individual Annuity The Individual Annuity a re s o u rc e i n yo u r r e t i r e m e n t an age of Decision Retirement today requires more planning than for previous generations. Americans are living longer many will live

More information

Supporting the Oldest Old: The Role of Social Insurance, Pensions, and Financial Products

Supporting the Oldest Old: The Role of Social Insurance, Pensions, and Financial Products Supporting the Oldest Old: The Role of Social Insurance, Pensions, and Financial Products Jon Forman Alfred P. Murrah Professor of Law University of Oklahoma College of Law for Living to 100 Orlando, Florida

More information

APPENDIX 5. Hewitt Associates report on Benefit Options at Retirement

APPENDIX 5. Hewitt Associates report on Benefit Options at Retirement APPENDIX 5 Hewitt Associates report on Benefit Options at Retirement May 2005 National Pensions Review APPENDIX 5 HEWITT ASSOCIATES report ON Benefit Options at Retirement Contents Introduction 143 Current

More information

The 50% Indicator Investment Security Analysis. Robert Ruggirello, CFA

The 50% Indicator Investment Security Analysis. Robert Ruggirello, CFA November 11, 2015 The 50% Indicator Investment Security Analysis Robert Ruggirello, CFA Introduction: The 50% Indicator is an investment opportunity available to some NYC Employees. There has been some

More information

Annuities: Good, Not so Good, or Bad? (Another Free InvestEd Webinar)

Annuities: Good, Not so Good, or Bad? (Another Free InvestEd Webinar) Annuities: Good, Not so Good, or Bad? (Another Free InvestEd Webinar) Bob Adams 2013 B. Adams 4 Annuities: Good, Not so Good, or Bad? Are They For You? More often than not, it s clear that variable annuities

More information

For the purposes of this Standard, a living annuity is one that complies with the definition of living annuity in the Income Tax Act.

For the purposes of this Standard, a living annuity is one that complies with the definition of living annuity in the Income Tax Act. STANDARD ON LIVING ANNUITIES (SLA) 1. Definition of a living annuity A living annuity is a special type of compulsory purchase annuity offered by insurers and retirement funds, under which the income (or

More information

Sovereign Annuities HOW CORPORATE PENSIONS WILL EVOLVE

Sovereign Annuities HOW CORPORATE PENSIONS WILL EVOLVE Sovereign Annuities 1. How will defaults operate in practice? The Irish Life policy will be to pass on the proceeds of the Sovereign Bonds to pensioners at whatever level is payable from the bonds. Therefore

More information

Buyer s Guide for. Deferred Annuities

Buyer s Guide for. Deferred Annuities Buyer s Guide for Deferred Annuities Prepared by the NAIC National Association of Insurance Commissioners The National Association of Insurance Commissioners is an association of state insurance regulatory

More information

Meeting with your Financial Planner: Helpful Directions

Meeting with your Financial Planner: Helpful Directions Meeting with your Financial Planner: Helpful Directions Please consider the following before our meeting: Information we anticipate you will need to provide at our first consultation: Part 1 1. Your domestic

More information

Waddell & Reed Advisors Select Plus Annuity SM Invest in your future

Waddell & Reed Advisors Select Plus Annuity SM Invest in your future Investment choices performance report January 31, 2016 Waddell & Reed Advisors Select Plus Annuity SM Invest in your future Answers to frequently asked questions. What you should know about purchasing

More information

Payouts. Protection. In One Place.

Payouts. Protection. In One Place. Payouts. Protection. In One Place. ING Single Premium Immediate Annuity issued by ING USA Annuity and Life Insurance Company Your future. Made easier. Payouts. Protection. In today s financial world, some

More information

Pensions Freedom. What do the pension changes really mean? This is for information purposes only.

Pensions Freedom. What do the pension changes really mean? This is for information purposes only. Pensions Freedom What do the pension changes really mean? This is for information purposes only. Pensions Freedom March Budget 2014 introduced unprecedented changes to how pension benefits can be taken

More information

Payouts. Protection. In One Place.

Payouts. Protection. In One Place. Payouts. Protection. In One Place. ING Single Premium Immediate Annuity ANNUITIES Your future. Made easier. Payouts. Protection. In today s financial world, some products provide payout options. Others

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

Retirement planning with Group Superannuation. ICICI Prudential Group Superannuation Plan. Eligibility. Superannuation Benefits payable

Retirement planning with Group Superannuation. ICICI Prudential Group Superannuation Plan. Eligibility. Superannuation Benefits payable Retirement planning with Group Superannuation After a valuable professional career with an organization, employees require the security of a regular income flow when they retire. Organizations help employees

More information

BENEFITS. The remainder of your fund is used to provide a pension, in one of 2 ways:

BENEFITS. The remainder of your fund is used to provide a pension, in one of 2 ways: BENEFITS Online links to further information are shown in underlined text below. Contents 1. Your own benefits 2. Benefits on death 3. Issues to consider 4. Other points These notes outline the benefits

More information

HOW TO EFFECTIVELY REDESIGN BENEFIT PLANS TO BALANCE YOUR BUDGET CONSTRAINTS AND YOUR EMPLOYEES NEEDS. Robert D. Klausner Klausner & Kaufman, P.A.

HOW TO EFFECTIVELY REDESIGN BENEFIT PLANS TO BALANCE YOUR BUDGET CONSTRAINTS AND YOUR EMPLOYEES NEEDS. Robert D. Klausner Klausner & Kaufman, P.A. HOW TO EFFECTIVELY REDESIGN BENEFIT PLANS TO BALANCE YOUR BUDGET CONSTRAINTS AND YOUR EMPLOYEES NEEDS Robert D. Klausner Klausner & Kaufman, P.A. Presentation Overview Pension restructuring and cost control

More information

Annuities and alternative ways of providing retirement income

Annuities and alternative ways of providing retirement income Annuities and alternative ways of providing retirement income Chris Daykin, United Kingdom Presented to the PBSS Seminar Part of the IACA, PBSS & IAAust Colloquium 31 October 5 November 2004 This paper

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

ApEx4. Retirement Planning

ApEx4. Retirement Planning ApEx4 Retirement Planning Version 2 January 2007 Summary of Learning Outcomes LEARNING OUTCOME H1 INTEGRATED LEARNING OUTCOME FOR THE APPROPRIATE EXAMINATIONS STANDARDS FOR RETAIL INVESTMENT ADVICE It

More information

Actuarial Speak 101 Terms and Definitions

Actuarial Speak 101 Terms and Definitions Actuarial Speak 101 Terms and Definitions Introduction and Caveat: It is intended that all definitions and explanations are accurate. However, for purposes of understanding and clarity of key points, the

More information

Glossary for Use with the Comprehensive Benefit Funding Plan

Glossary for Use with the Comprehensive Benefit Funding Plan Caring For Those Who Serve 1901 Chestnut Avenue Glenview, Illinois 60025-1604 1-800-851-2201 www.gbophb.org Glossary for Use with the Comprehensive Benefit Funding Plan Accumulated Post-Retirement Benefit

More information

Retirement Benefits in Hong Kong

Retirement Benefits in Hong Kong Retirement Benefits in Hong Kong Introduction In Hong Kong, there are several types of retirement benefits sponsored by different parties as shown below. Government-sponsor - Old Age Allowances from the

More information

pension funds Occupational pension funds Banks ATP SP Year End - DKKm

pension funds Occupational pension funds Banks ATP SP Year End - DKKm Assets: 2013 2013 2013 2013 2013 2013 2013 2013 Investment Property 3,1 11,0 1,3-7,6 - - associated undertakings 371,7 85,6 2,0-68,7 - - Participating interests 71,6 35,1 0,5-30,5-17,0 Unit of unit trust

More information

CALIFORNIA ANNUITY TRAINING 4 HOURS. 1. A producer s obligation to ensure that an annuity is suitable ends.

CALIFORNIA ANNUITY TRAINING 4 HOURS. 1. A producer s obligation to ensure that an annuity is suitable ends. CALIFORNIA ANNUITY TRAINING 4 HOURS 1. A producer s obligation to ensure that an annuity is suitable ends. A. when the customer signs the application B. when the customer pays the first premium C. when

More information

Voya Single Premium Immediate Annuity

Voya Single Premium Immediate Annuity Voya Single Premium Immediate Annuity issued by Voya Insurance and Annuity Company Payouts. Protection. In One Place. Payouts. Protection. In One Place. In today s financial world, some products provide

More information

ATTACHMENT 10 STATEMENT OF REFORM PRIORITIES, CHALLENGER SUBMISSION TO TAX FORUM, OCTOBER 2011

ATTACHMENT 10 STATEMENT OF REFORM PRIORITIES, CHALLENGER SUBMISSION TO TAX FORUM, OCTOBER 2011 ATTACHMENT 10 STATEMENT OF REFORM PRIORITIES, CHALLENGER SUBMISSION TO TAX FORUM, OCTOBER 2011 Ik A tax plan for our future Stronger. Fairer.Simpler TAX FORD 4-5 October 2011 -qq STATEMENT OF REFORM PRIORITIES

More information

Gift Annuity Risk Analysis Options

Gift Annuity Risk Analysis Options Gift Annuity Risk Analysis Options It should come as no surprise that charitable gift annuities feature a measure of risk. Nevertheless, a charity can take steps to maximize the likelihood its gift annuity

More information