Retirement Gateway’s Personal Income Benefit℠ Hypothetical Illustration
The Personal Income Benefit℠ (PIB) is an optional "pension-like" plan benefit available for an additional fee through the Retirement Gateway® group variable annuity that can be funded with payroll contributions and rollovers from other plans. At a later date, it provides guaranteed lifetime withdrawal payments called the Guaranteed Annual Withdrawal Amount, or GAWA. This tool helps you understand how much the GAWA could be, depending on how much is contributed and/or transferred and the age at the time GAWA withdrawals begin.
About Retirement Gateway®
Retirement Gateway® group variable annuity is a long-term financial product designed for retirement purposes. In simplest terms, it allows company employees to build assets by contributing on a tax-deferred basis and at some point in the future, if they choose, to begin receiving retirement income. To provide the investment and insurance-related benefit, a group variable annuity contains certain fees, including contract fees, a mortality and expense charge, administrative charge, withdrawal charges, investment option fees and charges for any optional benefits elected. Group variable annuities will fluctuate in value and may be affected by market declines, including a possible loss of principal.
To learn more about how PIB works and to access Key Facts about the Personal Income Benefit℠, please refer to the “Results” section.
Annual Net returns, account value, GAWA and all of the other values on this page are hypothetical, are not guaranteed, and will vary. This illustration is hypothetical and is not a projection or prediction of future results. This illustration is designed to show how the performance of underlying investment portfolios and other factors may affect contract values over an extended period.
This illustration is provided for informational purposes only. It is made available to you as a self-help tool for your independent use and is not intended to provide investment advice. The information provided is hypothetical and does not reflect a particular investment or performance. We cannot and do not guarantee its applicability or accuracy in regards to your individual circumstances. We encourage you to seek personalized guidance from financial professionals regarding all personal finance issues.
This analysis is based on information and assumptions provided by you. Actual results will vary. The assumed rate of return is not guaranteed.
Key facts about the Personal Income Benefit℠
Investing eligibility
The Personal Income Benefit℠ investment option is available to plan participants between the ages of 45 and 85.
The Personal Income Benefit℠ feature is not appropriate if you do not intend to take withdrawals prior to annuitization.
If your employer chooses not to offer the Personal Income Benefit℠ investment option, you can elect one of the available distribution options under the plan.
Participants should consider the costs and benefits of the Personal Income Benefit before selecting this feature.
Contributions
As with other 401(k)/457(b) investment options, there are three ways to contribute:
Make ongoing salary deferrals or a one-time contribution
Transfer funds from other plan investment options
Transfer balances from other retirement plans
Participant withdrawals
Payments can be taken at any time after age 59½ (subject to plan rules). The age at which payments begin will affect the amount of the income benefit. Additional contributions or transfers cannot be made after the GAWA payments begin.
Maintaining the guarantee
Participants can withdraw the GAWA up to the maximum amount subject to the specific requirements set forth in the disclosure document. An early withdrawal is caused when you take a withdrawal from your account value before you have elected to receive GAWA payments. An excess withdrawal is a withdrawal in the amount greater than the GAWA. A Personal Income Benefit Early or Excess Withdrawal can cause a significant reduction in both the Ratchet Base and the Guaranteed Annual Withdrawal Amount. If the Participant makes a Personal Income Benefit Early or Excess Withdrawal, we will recalculate the Ratchet Base and the Guaranteed Annual Withdrawal Amount. The withdrawal will reduce the Ratchet Base and the Guaranteed Annual Withdrawal Amount on a pro rata basis. Reduction on a pro rata basis means we take the percentage of the Personal Income Benefit Account value withdrawn and reduce the Ratchet Base and the Guaranteed Annual Withdrawal Amount by that same percentage. If, at the time the Participant takes a Personal Income Benefit Early or Excess Withdrawal, the Personal Income Benefit Account Value is less than the Ratchet Base the pro rata reduction in the Ratchet Base will be greater than the dollar amount of the withdrawal. If the Personal Income Benefit Account Value falls to zero due to a Personal Income Benefit Early or Excess Withdrawal, the Personal Income Benefit (including Guaranteed Annual Withdrawal Amount payments) will terminate and no additional GAWA payments will be made. Once terminated, the Personal Income Benefit cannot be restored.
Annual fee
There is an annual fee that covers the cost of providing the guarantee equal to 1% of the participant's Personal Income Benefit℠ account value.
Column Definitions
Annual Net Return
This is the assumed rate of return that is applied to the contribution or transfer. For the Variable assumption, the rates are generated from a model that simulates returns based on a blend of 50% equity and 50% fixed income and includes deductions for Retirement Gateway maximum charges of 2.00% per year asset charge, 1.08% per year for investment management fees, and 1.00% a year for the Personal Income Benefit. The average net annual rate of return of the account value is 4.1% and the average gross annual rate of return is 6.43%.
Guaranteed Annual Withdrawal Amount
The Guaranteed Annual Withdrawal Amount (GAWA) is determined by multiplying any contribution(s) by the applicable Guaranteed Withdrawal Rate plus any transfer(s) multiplied by the applicable Guaranteed Transfer Withdrawal Rate, plus any Ratchet Increase. The Guaranteed Withdrawal Rate and the Guaranteed Transfer Withdrawal Rate are percentages, based in part on the 10-Year Treasuries Formula Rate plus an age-based spread. It will vary depending on the date the contribution or transfer is made, the nature of the contribution or transfer, and the participant's age at the time the contribution or transfer is made. Guaranteed Withdrawal Rates applied to contributions are set each quarter. Guaranteed Transfer Withdrawal Rates applied to transfers are set each month. Both can be as high as 7% but neither will be less than 2.5%. The GAWA is based on a percentage of contributions and amounts transferred to this feature. The percentage can be as high as 7% and never less than 2.5%. The percentage is equal to a 10-Year Treasury Rate plus a percentage that ranges from 0.25% to 1.00 based on the participant's age. The percentage is 1.00% if the participant is between the ages 21 and 50, and declines by 0.05% each year until it reaches 0.25% at age 65. In this illustration, it is assumed that the 10-Year Treasury Rate is equal to 3% each year and the age-based spread is added to that percentage. As noted earlier, there can also be a Ratchet Increase based on the investment performance of the Personal Income Benefit investment option. This would be represented in the illustration by an increase in the amount of the Guaranteed Annual Withdrawal Amount column from one year to the next. Please see the Income Base column description below for more information on Rachet Increases.
Account Value
This is Transfers/Contributions with an assumed rate of return applied net of fees as described in the Annual Net Return description. The amount in this column also represents the benefit that would be paid to a beneficiary in the event of the participant's death unless payments from an annuity distribution option have already begun. During the first 5 years the following charge applies to withdrawals as a percentage of contributions as follows: 3/3/2/2/1%. The Account Value represents the surrender value of the contract if the owner elects to terminate the annuity.
Income Base
In the Disclosure Brochure "Income Base" is referred to as a "Ratchet Base." The Ratchet Base is an employee's cumulative amount of contributions and transfers to the Personal Income Benefit variable investment option plus any previous Ratchet Amounts (less any early/excess withdrawals) and is recalculated each year to equal the greater of the account value and the most recent Ratchet Base. If the account value is higher due to investment performance, the Ratchet Base is increased to equal the account value. This increase is called a Ratchet Amount. If an annual ratchet occurs, the difference between the prior Ratchet Base and the current Ratchet Base is multiplied by an average Guaranteed Withdrawal Rate and is then added to the Guaranteed Annual Withdrawal Amount for the next year. The Account Value in this illustration is increased or decreased based on an assumed hypothetical rate(s) of return.
Additional Information
Retirement Gateway® and the Personal Income Benefit℠ feature may not be available in all jurisdictions or in all plans. Retirement Gateway® is a group variable annuity that can be used to fund a tax- deferred retirement plan. Annuities used to fund these plans do not offer any extra tax benefits. If you are buying a Retirement Gateway® group variable deferred annuity to fund a plan, you should do so for its features and benefits other than tax deferral. For costs and complete details, contact your financial professional.
The information provided in this illustration is not a complete description of all of the material provisions of the contract. All guarantees are based on the claims-paying ability of Equitable Financial Life Insurance Company.
This illustration must be preceded or accompanied by the Retirement Gateway® disclosure brochure and the trust investment option prospectus. These materials contain more detailed information about the contract, including investment objectives, risks, charges and expenses. Please read them and consider this information carefully before investing.
If you are purchasing an annuity contract to fund a qualified plan you should be aware that such annuities do not provide tax-deferral benefits beyond those already provided by the Internal Revenue Code. Before purchasing one of these annuities, you should consider whether its features and benefits beyond tax deferral meet your needs and goals. You may also want to consider the relative features, benefits and costs of these annuities with any other investment that you may use in connection with your retirement plan or arrangement.
Withdrawals from annuities are subject to normal income tax treatment and, if taken prior to age 59½, may be subject to an additional 10% federal income tax penalty. Withdrawals may also be subject to a contractual withdrawal charge, which will not exceed 6% of the amount withdrawn or last longer than five years from the contract date. Equitable Financial Life Insurance Company may discontinue the acceptance of, and/or place limitations on, contributions and transfers into the contract and/or certain investment options. Annuities contain certain risks and limitations. For costs and complete details, please contact a financial professional.
This material is not a complete description of the Personal Income Benefit℠ or the Retirement Gateway® group variable annuity.
The Retirement Gateway® group variable annuity is issued by Equitable Financial Life Insurance Company (New York, NY). Distributors: Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI & TN) and Equitable Distributors, LLC. Equitable Financial Life Insurance Company, Equitable Advisors and Equitable Distributors are affiliated.
Contract form #2005GAC-QP, 2012RDPIB-RG, 2012QPRG, 2011RG-457 and any state variations
GE-128570 (9/17),(Exp. 9/17)
