An Improved Application of the Variable Annuity

By Stephen A. Eadie · Global Risk Institute · 2017 · RET101-115-25

Study guide: Exam RET-101

A February 2017 Global Risk Institute report by Stephen A. Eadie on variable annuities as a payout mechanism for pension plans, in which a "hurdle rate", the plan fund's targeted real rate of investment return, is compared with actual returns to adjust monthly pensioner payments each year. It assesses two potential improvements to the variable annuity for qualified US and registered Canadian pension plans, aiming at more stable increases to members' monthly pensions and better control of post-retirement risks.

On the syllabus

• Exam RET-101 — RET101-115-25; outcomes 2d, 4a-4n.

Executive Summary

I Introduction

II Managing Risk in a Frozen Funding Environment

III Managing Volatility in Pension Increases

IV Comparing a Variable Annuity to an Insured Annuity

V Comparing a Variable Annuity to Individual Investment Accounts

VI Fairness for Members in a Variable Annuity Fund

VII Regulation and Governance of a Variable Annuity Fund

VIII Summary and Conclusions

Sources

• An Improved Application of the Variable Annuity (Stephen A. Eadie, Global Risk Institute, 28 February 2017) — the document: title page, author, executive summary and the numbered section headings
• An Improved Application of the Variable Annuity (Global Risk Institute publication page) — the publication date, the author and the executive summary; the report is identified with the SOA's reading by its title, since the SOA's study notes are sold through its online store and were not seen
• RET 101 Syllabus, Nov 2026/Mar 2027/Jul 2027 (SOA) — the citation (RET101-115-25) and the learning outcomes under which the reading is assigned