The annuity, Crossings: My Lifetime IRA, is the first product developed by Corporate Markets, AXA’s new distribution channel focused on providing retirement plan strategies and solutions for Fortune 1000 corporations and their employees (See AXA Introduces New Unit to Provide Retirement Plan Solutions for Large Companies).
“The core of the Crossings solution is a variable deferred annuity designed to turn retirement plan assets from defined contribution plans, such as 401(k)s and lump sum defined benefit plans, into a guaranteed annual income stream – regardless of underlying investment performance – for as long as the retiree lives,’ said Bill McDermott, Executive Vice President of AXA Equitable and Head of Corporate Markets, in a press release.
Features of the new product, according to the release, include:
- Professional investment management and choice – Crossings owners have the flexibility and simplicity of choosing from among five professionally-managed investment portfolios that range from conservative to aggressive so owners can choose the right style to fit their goals. The portfolio choice can be changed at any time with no cost. Amounts in an annuity’s variable investment portfolio are subject to fluctuation in value and market risk, including loss of principal.
- Guaranteed lifetime income with downside protection – Crossings owners will receive a Guaranteed Annual Payment (GAP) for the rest of their lives. The GAP amount is 5% of their income base, which is equal to the amount of their initial rollover contribution. The GAP can go up, but it can never go down based on market performance, even if the account balance goes to zero. GAP payments, which are withdrawals from the contract, can begin as early as age 59 세 and will last for the rest of the owner’s life, and the life of his or her spouse if they choose the joint option. The only time the GAP will be reduced is if the owner makes withdrawals in excess of the GAP in a contract year.
- Upside potential – Until a Crossings owner begins withdrawals, the value of the income base will grow by a minimum of 6% annually through a deferral bonus, regardless of investment performance. Through an annual step-up, on each contract anniversary, if the account value is higher than any previous anniversary, the income payment automatically increases and the new, higher GAP is locked in for life. Since the downside protection allows Crossings owners to remain invested in equities, there is more potential for the account value to increase if the market performs well. Since the account value can go up with strong market performance, Crossings also gives owners a way to hedge against inflation. Prior to the first withdrawal, any year the owner is eligible for both an annual step-up and a 6% deferral bonus, he or she will get the greater amount.
- Access to the account balance – Crossings owners can withdraw their account balance at any time. If the account has been open for three contract years, there is no surrender charge. If an excess withdrawal is needed in the first three years, the owner will pay a surrender charge of 2% of the excess amount.
- Something for the next generation – Upon the owner’s death (or the death of his or her spouse if the joint option is selected), the remaining money in the account balance will be available to the owner’s beneficiaries.
Along with the product, Corporate Markets is providing fact-based education and ongoing support to employees before, at, and after retirement delivered through work-site seminars, Web-based tools and individual counseling accessible via a service support call center, the announcement said. Additionally, individuals specifically trained to support the large corporate market will be available at work-sites to provide employees one-on-one education and counseling.
For a prospectus call 212-314-4181.