Annuity Payments Research Articles

Towards Formation and Development of Orthopaedic and Traumatologic Care to Population (Commemorating the 90th anniversary of the foundation of Kharkov Scientific Research Institute of Orthopaedics and Traumatology named after M.I.Sitenko)

At the beginning of the twentieth century, industrial injuries began to grow simultaneously with the intensive development of industry. In 1904 the Russian government was forced to introduce a law on insurance of workers against accidents. This entailed a significant increase in expenses of plant and factory owners for the payment of life annuities to the injured, which forced them to reconsider their attitude to the prevention of injuries and treatment of patients with injuries of the musculoskeletal system received at work, which in most cases led to disabling injuries.

The True spirit and original intent of Treaty 7

The True Spirit and Original Intent of Treaty 7 is based on the testimony of over 80 elders from the five First Nations involved in Treaty 7 - the Bloods, Peigans, Siksika, Stoney, and Tsuu T'ina. Their recollections highlight the grave misconceptions and misrepresentations between the two sides, due in part to inadequate interpretation and/or deliberate attempts to mislead. The elders consistently report that the treaty as they understood it was a peace treaty, not a surrender of land, and that they had agreed to share the land with the white newcomers in exchange for resources to establish new economies - education, medical assistance, and annuity payments. The book provides both a historical overview of Treaty 7 and an analysis of the literature on treaties generally and Treaty 7 specifically. It makes clear that different agendas, different languages, and different world views affected each side's interpretation of events. This review of the events and interpretations surrounding Treaty 7 takes place at a time when aboriginal and indigenous peoples all over the world are re-evaluating their relationships with imperial powers. It was undertaken in good faith in hopes that it will begin a dialogue that can alter the dominant discourse of Euro-Canadian society, which has been so damaging to aboriginal people.

Modelling reverse mortgages

This paper suggests a framework for analyzing reverse mortgages in a fixed interest rate environment as well as a variable interest rate environment. To analyze the risk and potential profit of a reverse mortgage, we propose to calculate the expected present value of profit and the probability of loss as indicators of the viability of the loan. Using Singapore data, we provide some estimates of these quantities for various levels of annuity payment under different circumstances.

Reverse Mortgages and Prepayment Risk

This paper presents a detailed assessment of the Connecticut Housing Finance Authority (CHFA) reverse annuity mortgage (RAM) program. Because of the size and payment history of the program, the analysis provides an empirical framework on which to develop and assess other home equity conversion (HEC) programs. The program offers insights into the economic impact of these programs and the factors affecting prepayment. The program issued 765 annuities over five years, and 240 of these loans have terminated payments. The annuity payments had a demonstrable financial impact on the elderly participants, with an 88% average annual income increase. Prepayment rates varied across borrower and loan characteristics. The rates were most sensitive to marital status and were heavily affected by the age of the borrower and the term of the loan. Although default risk exists, the evidence indicates a low probability of the loan value exceeding the house value.

Rainforest trees as a new crop for Australia

On analysis has been carried out of the prospects of using lesser known trees as new crops, mainly for high quality cabinetwood production. The economic returns of 43 rainforest trees were assessed using expert opinion and the Delphi method to provide an evaluation and ranking of the most valuable species. Cuban mahogany ( Swietenia mahogeni), American mahogany ( Swietenia macrophylla), West Indian cedar ( Cedrela odorata), teak ( Tectona grandis), and hoop pine ( Araucaria cunninghamii) were identified by a simple model as the most valuable tree species. Sensitivity analyses were carried out on the effect of both increased long term timber prices and changes in tree productivity on financial returns. Further research on plantation development and an extensive literature review of the top ten species is also needed. Global warming scenarios indicate that the relative viability of plantations of tropical rainforest species in northern Australia will improve as a result of smaller temperature increases and higher rainfall than in southern Australia. Conditions are now more economically favourable for commercial tree planting than in the past and could lead to the future involvement of financial organizations and the payment of annuities to owners of tree farms. An ultimate aim is the development of markets in tree farms or plantations to those in agricultural enterprizes generally.

Remarks on the obligation of the liability insurer in cases of annuity payments

Remarks on the obligation of the liability insurer in cases of annuity payments

Urology and the Work Environment (II): Forensic Evaluation of Urological Trauma in Work Injuries

After a study of case histories relating to work accidents followed by admittance to hospital, the authors then closely examine the question of temporary disablement and eventual consequences. The most common and interesting forensic findings are connected with traumatology of the urethra, the external genitalia and the kidney. With reference to President's Decree No. 1124 of 30.6.65 and to Italian law No. 457 of 8.8.72, it is pointed out that evaluation of disablement must always be carried out in relation to the general working capacity of a factory or agricultural worker and not to the specific working capacity. An annuity payment for the disabled worker also exists when there is permanent disablement of over 10%; evaluation of consequences becomes definitive only 10 years after the annuity has been established. Percentages relating to the loss of a kidney, bladder complications, urethral strictures and genital injuries are given.

Reservation Leadership and the Progressive-Traditional Dichotomy: William Wash and the Northern Utes, 1865-1928

Reservation Leadership and the Progressive-Traditional Dichotomy: William Wash and the Northern Utes, 1865-1928

Intercohort and Intracohort Redistribution under Old Age Insurance: The 1962–1972 Retirement Cohorts

Although Social Security Old Age Insurance (OAI) is similar in some respects to a private annuity, benefits typically contain large intercohort and intra-cohort redistribution components. The former are declining over time but the latter are a permanent feature of the program. This study disentangles the actuarially fair and redistributive elements in OAI benefit payments to a sample of individuals from the 1962–1972 retirement cohorts. Incidence of benefits, actuarially fair annuity payments, and redistributive components across income groups are presented in tabular form. Regression analysis is used to estimate the relationship between redistribution components, as a percentage of benefits, and various characteristics of the retirement population.

Studies in the History of Probability and Statistics. XXXV: Multiple decrements or competing risks

Given two states A and B such that individuals in state A have mutually exclusive probabilities, possibly dependent on the time spent in state A, of leaving that state because of (i) death, or (ii) passage to state B, what is the probability of an individual passing to state B and dying there within a given period? This problem has been of great interest and importance to actuaries for over 100 years and the solutions of their professional contemporaries have appeared in their textbooks. Twenty-five years ago statisticians felicitously named the technique the theory of competing risks (Neyman, 1950) and developed the formulae ab initio in the framework of Markov processes. Consideration of the problem started with Daniel Bernoulli's smallpox mathematics and continued with pension fund financing involving the payment of annuities to invalid lives. Most of the currently accepted techniques were developed during the nineteenth century. This article reviews the history both of actuarial and statistical contributions to the literature.

Men, Women, and Life Annuities

One of the results of the greater longevity of women is that annuity payments to women must continue over a longer span of years, on the average, than to men. If annuity accumulations are equal at retirement, this means that the monthly benefit under one-life annuity options is somewhat less for women than for men. In recent years, some women's groups have questioned this difference. This article discusses the issues involved and raises some of the implications for plan participants and employers. The life annuity is a unique payment mechanism designed to meet a serious human problem-how to get from retirement savings the largest possible monthly income without running the risk of outliving the income. No other financial arrangement meets the two objectives of (1) maximum income that (2) has no chance of being outlived. These objectives are crucial tests for retirement income security. Recently a controversy has arisen as to whether a third test for providing retirement income should be added. Some women's groups have suggested that annuitants owning identical amounts of retirement savings should receive the same monthly income from those savings regardless of the length of time over which the incomes are expected to be paid. At present, similarly situated men and women receive benefits that are actuarially equal. The specific question in the current controversy is whether women who elect one-life annuity options under an individual annuity contract should receive the same monthly benefits as men of the same age who have exactly the same annuity accumulation amount, although this means that on the average women would be paid a substantially larger total amount of money because of their longer lifetimes.

Media for Funding Variable Annuities

This paper considers first the media available to fund a variable annuity for an individual, and then the additional media available to fund variable annuities for groups under pension plans, profit sharing plans and tax-sheltered annuity programs. Finally it studies some of the considerations in selecting a particular funding medium. The study focuses its attention on annuities involving life contingencies, but also treats perpetuities and annuities for a definite period of years. It deals with media to fund annuities varying with a cost-of-living index, a wage index or a mathematical formula, as well as annuities related to equity prices. Although variable annuities of some types have existed for centuries, the modern development of variable annuities in the United States began in 1952, when Teachers Insurance and Annuity Association, Long Island Lightning Company and Chemstrand, Inc., all established variable annuity pension programs. In the fifteen years since then a wide variety of media have developed for funding variable annuities. These media are the financial institutions and legal instruments through which the annuities are funded. George E. Johnson, A.B., LL.B., C.L.U., F.L.M.I., joined Metropolitan Life on September 1, 1967 as a consultant on group variable annuity plans. Mr. Johnson was formerly vice-president and general counsel of Teachers Insurance and Annuity Association and of College Retirement Equities Fund; he was the first president of Equity Annuity Life Insurance Company and Variable Annuity Life Insurance Company, and was acting president of the National Health and Welfare Retirement Association. Donald S. Grubbs, Jr., B.S., F.S.A., is an independent consulting actuary with offices in Philadelphia. Before establishing his own offices, Mr. Grubbs was associated with John B. St. John, Consulting Actuary, and prior to that he was employed by Warner-Watson, Inc., Consulting Actuaries, and by the New England Mutual Life Insurance Company. He has actively worked with a variety of variable annuity pension plans for the past eight years. This paper summarizes the results of a study of the funding media that have developed. It considers first the media available to fund a variable annuity for an individual, and then the additional media available to fund variable annuities for groups under pension plans, profit sharing plans and tax-sheltered annuity programs. Finally it discusses some of the considerations in selecting a particular funding medium. The study focuses its attention on annuities involving life contingencies, but also treats perpetuities and annuities for a definite period of years. Most of the media discussed may be used only for annuities related to equity prices, but media to fund annuities varying with a cost-of-living index, a wage index or a mathematical formula are also considered. Individual Variable Annuities All annuities may be classified by the period during which annuity payments continue. First are perpetuities under which the payments continue perpetually, or indefinitely into the future. Second are annuities payable for a certain period not related to the length of life. Third are This paper was given at the 1967 Annual Meeting of A.R.I.A.

The Investment Value of Common Stock Earnings and Dividends

THE PRESENT VALUE THEORY is a widely recognized concept in the field of finance, economics, and mathematics. In reflecting the time value of money, the present value theory and mathematical tables are widely used in the field of finance to determine life insurance premiums, annuity payments, mortgage payments, bond prices and yields, and rates of return on capital budgeting proposals. Although the concept is relatively new to the field of common stock investment, published works on the subject appeared more than twenty-five years ago.' A considerable amount of attention has focused on the application of the present value concept to common stocks, including the development of mathematical formulas, models, and tables, particularly in the last ten years.2 Nevertheless, some financial analysts are skeptical concerning tenets of the present value theory. Normally, present value calculations are applied to projected dividends, but some writers would prefer to base estimates of value on projected earnings. Consequently, the purpose of this article is to examine the role of corporate earnings and dividends in respect to the present value theory, first without consideration of stockholder income taxes, and then with the assumption of several personal income tax and capital gains tax considerations.

A COMMENT ON VARIABLE ANNUITIES

Variable Annuities are the subject of considerable discussion by individuals who identify themselves with life insurance companies and security dealers. The paper by Mr. Albert Linton published in the May, 1956, issue of the Journal of Finance is a case in point. This comment does not attempt to marshall arguments for or against variable annuities, but is concerned only with the major factors determining the size of the payments to be made from a variable annuity fund during the payment period. In Mr. Linton's Table 2, the assumption is made that the variable annuity payment would follow Standard and Poor's index of stock prices.1 The other major factor influencing the size of the annuity payment, the cash dividends that will be received by and added to the annuity fund during the period of the annuity payments, is omitted. This is comparable to omitting interest on the standard annuity contract. The purpose of Table 2 was evidently to display the magnitude of the fluctuations in variable annuity payments in contrast to the absolute dollar stability of the payments made under the terms of a traditional annuity contract. Mr. Linton emphasizes that “irate and disillusioned policyholders” might write letters to insurance commissioners and even congressmen when payments fall under variable annuity contracts. Such pressure might have been (or may be) the opportunity for federal regulation of those life insurance companies that issue variable annuity contracts. Column 1, Table 1, in this comment sets forth the fixed payment of $100 per month specified by Mr. Linton, Column 2 reproduces the assumed monthly payment made under a variable annuity contract as shown by Mr. Linton in his. Table 2, and Column 3 presents a revised statement of the monthly payment under a variable annuity contract taking cognizance of the dividends received by the annuity fund during each year of the life of the annuity. The period 1926 to 1954 is the period selected by Mr. Linton. According to Mr. Linton's presentation, the payments made under the variable annuity were less than those under the traditional contract in twelve of the twenty-nine years. The revised variable annuity payments fall below the fixed monthly payments of $100 in only three years. Furthermore, the lowest payment under the revised computation is $83 per month as compared with $49 per month shown by Mr. Linton. Certainly the intensity of the remarks in the policyholders' letters would be different if the variable annuity payments fell 17 per cent rather than 51 per cent below a norm established by the payment of a fixed number of dollars under a fixed annuity contract. Fixed annuity policyholders may well complain about the opportunities missed when they compare their $100 with the more than $200 monthly income in 1954 that might have been possible under a variable annuity contract. In the computation of Column 3, Table 1, the advantages accruing to the variable annuitant during the accumulation period have been foregone. Mr. Linton recognizes this advantage in suggesting that the rate of growth of funds during the accumulation period invested in a well-selected, properly diversified group of stocks has been larger than the rate of interest achieved by the investment portfolios that are the basis for traditional annuity contracts. We believe that such higher yields on equities are not dependent on inflation given the maintenance of our long-run rate of economic growth and that this relationship is very likely to continue. This position, however, must be left undefended since the space that may be alloted to a comment is very limited. Let the case of the conservative be admitted, however. The holder of a variable annuity contract, the annuitant, would take more risk with respect to the number of dollars he will eventually receive. Life insurance companies, other financial institutions, and even the structure of the capital markets will be affected by any considerable growth in the use of variable annuities. Such changes are certain to follow whether the life insurance companies themselves or some newly developed type of financial institution handles variable valued annuities.

Garnishment. Property Subject to Garnishment. Retirement Annuity Payments under Group Insurance Plan Cannot Be Garnished to Satisfy Alimony Arrearages

Garnishment. Property Subject to Garnishment. Retirement Annuity Payments under Group Insurance Plan Cannot Be Garnished to Satisfy Alimony Arrearages

Note on annuity certain contracts

The contracts discussed in this note are annuities certain provided by Life Offices. A schedule for income-tax purposes dividing payments into capital and interest determines the variable net sum paid by the office from year to year to the payee under each contract; it is the effect of this arrangement on the office to which attention will be drawn.To comply with the Assurance Companies Acts, 1909–46, and the Finance Act, 1938, section 27, the office must pay the considerations for such contracts into a fund which is separate from the life assurance and life annuity funds, and which must not relate to business effected before 1 January 1938. This fund is taxed on an interest less expenses basis (subject to certain limitations), and the full standard rate of tax is applied. However, the office is permitted to withhold tax on the interest portion of each annuity payment from the payee, and to retain this tax provided its amount is exceeded by the tax suffered on interest credited to the fund, adjusted for the relief on expenses. Profits tax will be ignored in this note; the tax position of the office as a whole has such an intimate bearing on the problem that further discussion would be outside the intended scope of the present analysis.

Approximate values of premium return assurances

Premium return assurances are often connected with annuities, with various provisions. In the following it is assumed that the amount to be returned at the death of the annuitant is equal to the difference between the purchase money and the annuity payments that have been received.

The Taxation of Annuities

(1) The proper method of taxation of annuities has been a subject of contention for many years, and it seems a suitable time to discuss what are the correct principles to be applied.(2) It seems illogical that life annuities should be taxed on a different principle from annuities payable for a fixed period not dependent on life. It also seems wrong that, whereas a person who has saved capital on which to live in old age may draw on the capital from time to time without being taxed on it, the same person if he buys an annuity so as to equalize the payments throughout the remainder of life has to pay tax on the capital content of the annuity.(3) Various methods(1) have been devised in other countries as practical measures giving some allowance for the capital content of annuity payments, but those methods that I have seen suffer to my mind from being founded on arbitrary rules rather than on principle. It should be noted that the practice of each country is bound up with the definition of taxable income and the treatment of wasting assets in that country. In Great Britain it is possible so to word an annuity contract that part of the annuity is not taxable, but personally I think the question of principle should be faced, and not avoided by rewriting the contracts in some other form.

Railroads: Damages under Employers' Liability Act: Use of Annuity Payments under Railroad Retirement Act in Mitigation of Damages

Railroads: Damages under Employers' Liability Act: Use of Annuity Payments under Railroad Retirement Act in Mitigation of Damages

On the Valuation of Staff Pension Funds

In a short paper, which I read before the Second International Actuarial Congress, held in these rooms in May 1898, I gave the solution of some problems which frequently arise out of the Rules of Pension Funds and Friendly Societies. That paper is printed in the Transactions of the Congress, published by the Institute, page 860. I was unfortunate in the selection of the table which I used for illustrating the formulas, as there was a printer's error in the value of the most important term. That, however, did not affect the formulas themselves. Mr. McGowan, in a letter to the Insurance Record of 2 February 1900, said that my remark on page 861 (of the Transactions), that “it will be P years before the annuity payments equal the price given, does not seem quite correct in the case where P is an integer plus a fraction”, and I explained, in a letter which appeared the following week, that the correction, which would be the value of the assurance of the fraction of the annuity for the fraction of the year in which the fraction would occur, is so insignificant that it might be ignored.