When you buy an annuity, you exchange a lump sum of money for a lifetime income. Various optional forms of life annuity allow you to provide continuing payments after your death to a spouse or other beneficiary. Annuities can be purchased from life insurance companies.
Life Only: Pension is paid for your life only. Payments cease at death.
Life with 5, 10 or 15-year guarantee: If you die before the end of the guarantee period, full payments continue to your beneficiary until the end of the guarantee period. If you live longer than the guarantee period, payments continue until your death.
Joint & Survivor: If you die before your spouse, a chosen percentage of your pension continues to be paid for the lifetime of your spouse.
Joint & Survivor with guarantee: if you die before the end of those chosen guarantee period (5, 10 or 15 years), your full pension continues to be paid to your spouse until the end of the guarantee period. At the end of the guarantee period, a chosen percentage of your pension continues to be paid for the remainder of your spouse's life. If you and your spouse both die during the guarantee period, your full pension is paid to the estate of the last surviving spouse for the remainder of the guarantee period.
You will find below a table which outlines the monthly payment offered by life insurance companies for single-life annuities (with no guarantee period) based on premiums of $75,000, $100,000, $250,000 and $500,000 of registered funds. Annuity Issuer Ratings provides the credit ratings on the life insurance companies noted below. These tables are updated monthly and are provided for illustration purposes only and are subject to change without notice. While every effort has been made to ensure the accuracy of the information provided, the McGill University Pension Administration Committee as well as the University are not responsible or any errors or omissions or for the results obtained from the use of such information. Members are cautioned to seek professional advice from a qualified independent advisor or financial planner.
Internal Annuities (McGill University Pension Plan)
The internal annuity option was eliminated for all settlements after December 31, 2010.