Single Premium
Group Annuities (SPGAs), also known as Terminal Funding, or Buyout contracts, guarantee the benefits of a pension plan’s retired, active or
deferred vested participants. SPGAs
are usually employed in situations which require that accrued benefits be
“settled” with commercial annuities. These include pensions plans which are
terminating, ongoing plans locking in high rates as an investment, FASB87-88
settlements, and plant closings due to mergers or acquisitions. An SPGA may reduce a pension plan’s annual
administration costs, reduce its un-funded liability, or increase the reversion
available from an overfunded plan.
SPGAs frequently
credit a higher rate than the actuarial interest rate a plan may be using for
valuing benefits. To maximize this rate differential a plan sponsor must
either monitor each insurance company’s
SPGA rates or delegate that function to an experienced SPGA consultant.
Constant surveillance is necessary to catch the changes in pricing among
competing carriers, which often occurs overnight as general market conditions
change and as each company moves closer to achieving its short term profit
an/or premium sales objectives. It is not uncommon that at different times
during the year SPGA quotes from the same company may vary by as much as thirty
percent!
BFA®
Family Wealth Planners can help a plan sponsor or consultant obtain the best
SPGAs for his terminating or ongoing plan. We represent more than 35 carriers
in this market—companies with the highest “AAA” and “A+” ratings. Our knowledge
of the special underwriting considerations that are of particular importance to
the insurance companies allows us to make sure that your plan is not rejected
simply because no one was available to answer questions of a routine or,
sometimes, technical nature. Our ability
to manage the flow of critical information helps you obtain the best contract
available to fit the needs of your plan.
We work directly
with those major insurance companies our research has determined to be
competitive in these markets. While our efforts are directed at providing
annuities at the lowest cost, consideration is also given to the quality of
services and financial strength the insurance company offers. We also provide
you with the means of maintaining continual contact with your insurance company
representatives from the time quotes are presented to you through the follow-up
period after the final contract and all certificates have been delivered. If
you have special needs on how the contract is to be serviced after the
takeover, we will negotiate with the insurers to cover these requirements and,
depending on their nature, to make certain that no additional costs are
imposed.
The following
companies provide us with competitive quotes in the immediate and deferred
annuity marketplace (several of these companies offer impaired risk annuities):
Aetna Life,
AIG Life, American Heritage, American
Mayflower, Ameritas Life, BMA, Canada
Life, Cova, First
Colony/General Electric, GE
Capital, Golden Rule, Guardian
Life, Hartford Life, Jackson
National Life, Jefferson Pilot, John
Hancock Life, Lincoln Benefit Life/Allstate, Lincoln/CIGNA, Manufacturers Life, Mass.
Mutual, Metropolitan Life, National
Guardian, Nationwide Life, Penn
Mutual Life, Pacific Mutual
Life, Peoples Benefit Life, Presidential
(NY), Principal Life, Protective
Life, Prudential Life, Reliastar
United Services, Security Mutual, Sun America, Transamerica Life, United
of Omaha, USG/ING
John is a Family
Wealth Planner for business owners, non-profit’s, attorneys, CPA’s, trust
companies and other financial planners throughout the nation. He has taught continuing education programs
for
John’s credentials include:
n Master's Degree in Financial
Services (MSFS) from The American College,
n Certified Fin. Planner (CFP) (1984),
n CLU (1981),
n Chartered Fin.
Consultant (ChFC) (1982),
n Certified
by Center for Fiduciary Studies for fiduciary audit and investment review
n Registered Investment
Advisor,
n Renaissance Associate of Renaissance Inc., the
largest administrator of charitable trusts in the country.
n
Exceptional Producer Affiliate, Bisys Insurance Services, Inc.
n
Life Insurance Counselor (LIC), State of
n
Author of Split Interest Amendment to Michigan
Professional Service Corporation Act of 1962
1. Comments
Supporting Senate Bill 775
2. Michigan Act
48, Public Acts of 1998, Enrolled Senate Bill 775
n
Instructor, Continuing Education Courses
1. Charitable Estate Planning,
Course #30216
2. Elements of Fiduciary Care, Course #34409