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Types of Annuities -
Terminal Funding Annuity |
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Terminal Funding Annuities
Single Premium Group Annuities (SPGAs), commonly known as Terminal Funding, Single Shot or Buyout contracts, guarantee the benefits of a pension plan’s retired, active or deferred vested participants. SPGAs are often employed in situations that require accrued benefits be "settled" with commercial annuities. These include pension plans that are terminating, ongoing plans locking in high rates a \s an investment, FASB 87-88 settlements, and plant closings due to mergers or acquisitions. An SPGA may reduce a pension plan’s annual administration costs, reduce its un-funded liability, or increase the reversion available from an overfunded plan.
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Glossary for definitions
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