The story so far: In 1986 my employer called us into a meeting with their financial advisor regarding the new pension/profit sharing plan. At the end of the meeting they asked those of us who had vested in the discontinued Defined Benefit Pension Plan to stay, both of us. I was furious that they had cancelled this plan just before a slew of my buddies would have vested. We were told that the plan was put into an Executive Life Insurance Company annuity (non-COLAed). During the meeting I remember thinking 15%!!! expected return, I thought my employer was getting off really cheap. (To be fair I may have mis-remembered it as 15%).
Here are the facts and numbers:
Executive Life Insurance Company Single Premium Retirement Annuity Contract, Life Annuity,
Monthly annuity payment: $326.25, first payment date, 10/01/08.
Cost of Retirement Annuity Contract applied for: $3,438.99.
May the Participant surrender his individual contract after it is issued but before his retirement? The "No" box is checked.
From a letter from my employer: "...a contract will be issued in your name which will guarantee the benefits provided by the plan. This will assure that the contract is in your possession and that your vested benefit will not be jeopardized by the future of the company, or the trustees’ inability to locate you in the future."
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Executive Life Insurance Company failed, got restructured by the State of Ca, and my contract was sold to Aurora National Life Assurance Company of Los Angeles.
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The State took over the contract 9/3/93:
This contract is issued pursuant to the Plan of Rehabilitation for Executive Life Insurance Company as ordered by the Superior Court of the State of California for the County of Los Angeles and replaces the Owner’s prior contract.
Date of prior contract: 2/28/86; Account Value on contract date before enhancement: $9,806.91, covered percentage: 100.0000%; Guaranty Association Enhancement Amount on Contract Date: $6,856.45, Allocation Holdback Amount on Contract Date: $1,471.04, additional holdback amount on contract date: $412.71, conservation date statutory reserve: $12,621.50, deferral interest rate, years 1-15 after issue date of prior contract: 11.000%, Annuity rate: 10.5000%, years 16-25 after issue date of prior contract: 10.500%, after 25th anniversary of issue: 10.500%, annuity mortality table: 83. Anticipated basic benefit payment: $192.00; anticipated Guaranty Association Benefit Payment Enhancement: $134.25; sum: $326.25.
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Aurora bought the contract:
Contract Values Summary as of 9/03/93 (including Election Forms):
Total estimated Aurora Account Value: $16,551
The statutory limit for your contract under your Participating Guaranty Association is: $100,000.
I didn’t opt out but here are the numbers: Total estimated first opt-out payment: $7,099; the amount above is after deduction of the Holdback Amount: $1,471.
Credited Interest Rates, daily basis: Unloaned account value 9/03/03 to 2/27/94: Short Term Interest Rate based on the 30 day U.S. Treasury Bill; 2/28/94 to first contract anniversary on or after 2/28/94: 5.34%, thereafter as declared by Aurora (Minimum 4%)
Loaned account value 9/03/03 to 2/27/94: 5.25%; 2/28/94 to first contract anniversary on or after 2/28/94: 5.25%, thereafter rate charged by Aurora on the loan balance less 2.25% (Minimum 4%)
From a letter from Aurora dated August 2000: "To better serve you, we are pleased to announce that on October 5, 2000, the MYND Corporation in Wethersfield, CT, which is in the greater Hartford area, will become the administrator of Aurora’s life insurance and annuity contracts. The MYND Corporation service team is committed to providing you with world class customer service and will be able to address all requests related to your life insurance or annuity contract.... Aurora appreciates the confidence you’ve placed in our company and looks forward to meeting your needs to come...."
On April 4, 2008 I requested info about my annuity, they will send out a benefit questionnaire and then will send me an "illustration."
To be continued.
