Text Box: Terminal Funding Annuities

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 Eastern Michigan University, Michigan Association of Certified Public Accountants, Fidelity Investments, University of Michigan,  Development officers, and various legal and accounting firms in Michigan and Florida.

John E. Mayer, CFP


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 Michigan

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