Members who retire, may wish to invest their accumulated fund credit in a living annuity. It is expected that pensioners, and their financial advisors, will make an active selection of the most appropriate investment portfolio as well as the drawdown rate to meet the individual pensioner’s needs over the life of the pensioner. The Default Investment Linked Living Annuity may however be suitable for those members who do not wish to make an active investment or drawdown decision.
Large negative market fluctuations combined with uncontrolled monthly drawdowns adversely influence the invested capital which in turn influences the longevity of an annuity.
The main characteristic of this product is that it combines a default investment portfolio with a default age-based drawdown strategy to manage the income over the life of the annuity. The member still retains the investment and longevity risk, but the Trustees assist to manage these risks.
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