Financial Services Industry
Industry: Email Alert RSS FeedNews: Workers warned variable annuties need further tests.
Pensions Week, March, 2008
Byline: David Rowley
Employees should exercise caution over purchasing variable annuities, as their value for money is not yet proven, claims Watson Wyatt.
Variable annuities enable customers to invest money in a range of funds and obtain an amount of equity exposure, while providing guarantees on the level of income paid from the product.
For this reason they have been heralded as a potential 'third way' alternative to traditional annuities and income drawdown.
However, Scott Robinson, a consulting actuary in the insurance and financial services practice at Watson Wyatt, believes the product needs more tests.
"The charges on variable annuities are already transparent, including the charges for the guarantees; what's less...
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