The report serves as a snapshot of the latest VA living benefits and available investment options. It can be used as a guide to:
- Monitor competing living benefit options,
- Identify investment limitations associated with key living benefits,
- Identify equity exposure on the investment options associated with living benefits,
- Compare living benefits and investment options across VA providers, and
- Compare fund performance and fund composition of the eligible investment options.
The research found the most common type of investment restriction was individual eligible funds, which are used among 19 of the benefits covered in the report. However, custom allocation programs were also popular and were used in 15 benefits. Model allocation programs were used in 12 benefits. Overall, 21 benefits employed multiple types of investment restrictions.
With coverage of 23 living benefits from 17 insurance companies, the summaries outline the characteristics of each in easy-to-understand language. The report covers benefit provisions in detail from non-withdrawal bonuses, such as Nationwide’s 10% Lifetime Income option, through lump sum payment options, such as Ohio National’s GLWB (Guaranteed Lifetime Withdrawal Benefit).
The fees, withdrawal percentages, and age breakpoints are laid out in grid formats to highlight multiple choices in benefit options such as Jackson National’s Freedom Flex bonus and step up options. The report explains features like SunAmerica’s Income Plus’s VIX-based fee calculation.
In addition, a breakdown of all available investment allocations is provided. Equity risk exposure is used to compare benefits and is based on the investment limitations of each benefit versus the actual current equity exposure of the underlying funds, SI explained.
For custom allocation models, the report features a proprietary equity exposure calculation with precise figures of the minimum fixed allocation as well as the maximum possible equity exposure, which is calculated using the most equity-heavy fund(s) available under the custom allocation. Combined with the custom allocation program’s investment threshold, this provides a look into each benefit’s investment make-up.
Total return and fee and expense reports on each individual underlying investment option are also part of the fund analysis. The details of model allocation programs also give a picture of the choice an investor may make when selecting a particular living benefit.