2016 Annuity Rates Recap

Annuity rates are closely tied to the 10 and 20-year Corporate Bond yields and during the course of the year we saw the following highs and lows. We think deferred annuity rates bottomed out around late August and then picked up about 80 BP and peaking when the Fed increased their rate. Immediate annuity rates increased about 100 BP from late September to shortly after the Fed increase. Since they peaked immediate rates are down about 15 BP and deferred rates about 25 BP. Interestingly immediate and TV rates are almost exactly where they were at the beginning of 2016 with rates for actives down about 20 BP.

We believe that the following rates applied to the mortality scale MP-2016 will give you a pretty good indication of the price of a group annuity contract. Use the smaller rate for small contracts.