Group Accumulation Annuities

Product

A group accumulation annuity is typically issued to you in a defined contribution plan or a group RRSP. These are typically sponsored by your employer, union or other association. A group accumulation annuity may also be issued to your plan sponsor in a defined benefit plan.

Your group accumulation annuity is an investment product that accumulates value by adding interest to the investments made by the plan sponsor or by you, the plan member. The interest rates may typically be guaranteed for periods of 1, 3, 5 and up to 10 years. Assuris’ protection applies to your accumulation annuity, regardless of the term. Accumulation annuities are commonly known as GICs (Guaranteed Investment Certificates).

Assuris Protection

If your life insurance company fails, Assuris will seek to transfer your policy to a solvent company.

Assuris guarantees that you will retain the amount of your investment under Assuris’ Accumulated Value benefit up to a maximum of $100,000.

  • For defined contribution plans and group RRSPs, where the individual has chosen an accumulation annuity, they will be protected as follows:
    • Assuris continues the group accumulation annuity benefits for each plan member. Assuris guarantees that you will retain the amount of your accumulation annuity under Assuris’ Accumulated Value Benefit up to a maximum of $100,000.
  • For defined benefit plans, where the assets are invested in an accumulation annuity, they will be protected as follows:
    • Assuris continues the group accumulation annuity benefits for the plan sponsor. Assuris guarantees that the plan sponsor will retain the amount of the investment under Assuris’ Accumulated Value Benefit up to a maximum of $100,000.

Example 1 — Defined contribution plans and group RRSPs

Accumulated Value Benefit

$80,000
Original Benefit Amount

In calculating your Assuris protection, you will retain the amount of your accumulated value benefit up to a maximum of $100,000.

Since the amount is less than $100,000, the accumulated value benefit is fully protected.

$80,000
Adjusted Benefit

Example 2 — Defined contribution plans and group RRSPs

Accumulated Value Benefit

$150,000
Original Benefit Amount

In calculating your Assuris protection, you will retain the amount of your accumulated value benefit up to a maximum of $100,000.

Since the amount is more than $100,000, your accumulated value benefit is protected for $100,000.

$100,000
Adjusted Benefit

The liquidator, appointed to manage the failed company, will seek to sell the assets and transfer the liabilities with the aim to get the best value for policyholders. This will determine the recovery percentage.

Your benefits will be adjusted to the greater of the Assuris protection or the recovery percentage achieved by the liquidator.

For example, if your accumulation annuity is greater than $100,000 and the liquidator recovers 90% of the assets, your benefit will be adjusted to 90% instead of Assuris’ maximum guarantee of $100,000.

Original Benefit Amount

Accumulated Value Benefit $120,000

Recovery

Liquidator Recovery:
$108,000
($120,000 × 90%)

Assuris Protection:
Up to $100,000

Explanation

Since the liquidator’s recovery is greater than Assuris’ protection, you will retain $108,000.

Questions and Answers

1. Will interest continue to be added after Assuris’ protection is applied?

Yes, interest will continue to be credited on the protected amount after the date of the failure, in accordance with the terms of the policy within the group.

2. What if your policy uses the change in a stock index instead of an interest rate?

The stock index will continue to be applied to the protected amount after the date of failure of the company, in accordance with the terms of the policy within the group.