NEW INTEREST RATE FORMAT

Often our clients will ask us to get insurance company prices for Terminated Vested and Active Participants. Since the vast majority of plan sponsors offer lump sums to these groups and the take rate can be as high as 95% getting annuity quotes is a useless exercise. The insurance companies know lump sums will be offered and they will simply provide most consultants just a “courtesy” quote that’s not very close to their true price. A waste of time for all and it doesn’t help plan sponsors because you can’t see their real price.

We’re now going to show you rates broken out by retirees, terminated vested and actives. We hope this new format is more helpful. We believe that the following rates applied to the RP-2014 Base Mortality Table with an MP 2014 projection for future mortality improvement will give you a pretty good indication of the price of a group annuity contract. Use the smaller rate for small contracts.