Don Maycock...advising you to and through retirement!

Think Annuities are Only for Individuals? Think again!

Annuities Are Also Used by Corporations

The other day I came across an article from GM Canada.  They recently transferred $1.8 billion of their pension assets to an annuity for their salaried pension plan members who retired prior to June 2020.  This represents about $300,000 per employee on average. Why would GM Canada do this rather than manage a pension plan as is more traditionally what happens.  It all comes down to managing risk and their view that they would rather transfers the risk of paying retired employees long term to an insurance company. In fact, it was divided amongst several large insurers.

Read more by clicking the following link, GM Canada strikes deal to offload $1.8-billion in employee pensions.

Longevity Risk

What GM is doing is not a lot unlike what an individual may want to consider for a portion of their retirement income. Buying a "life" annuity removes the worry that you might outlive an investment. Transferring a portion of your assets to an insurance company can be an affective way to minimize your "longevity" risk in retirement. The insurance company takes on the risk.  But what if an insurance company were to go bankrupt at some point in the future?

Assuris Protects Your Annuity Cash Flow

Assuris is the not for profit organization that protects Canadian policyholders in the event their life insurance company fails. Click the following link to learn how Assuris protects your annuity cash flow.

How I Can Help

Life annuities must be purchased by a life licensed insurance agent.  I am able to service investors across Ontario Canada and we don't have to meet in person one-on-one (read about my process here). If you would like to know what an annuity might pay in your situation, please click here to open the confidential form to request your custom Income Annuity Survey.

 

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