For immediate release
Today, the Ontario Government changed its mind and now intends to give former Nortel employees the choice to opt out of the windup plan for their pension and enlist private financial institutions to manage the pension fund.
Ted Wernham, President of Wernham Wealth Management, supports the decision that would provide choice for retired Nortel employees.
“If we were to consider a female, age 69, retired from Nortel, with a pension of $1000 a month for life, and guaranteed to be paid for 10 years in any event, our survey today indicates that Manulife would require the lowest single premium of $159,864, the best of the top eight Companies surveyed.
In other words, the price of her pension would cost $159,864 for every $1000 of monthly income guaranteed to be paid for the rest of her life.
Wernham agrees with the Nortel retirees who have complained about having “to convert the pension plan into annuities at a time when interest rates are extremely low, and pricing is unattractive”
His firm has researched the popular IncomePlus product, using the same lump sum with the result of obtaining a potentially increasing monthly pension averaging $1,156* per month over the first 10 years, received as a Life Income Fund.
A life annuity guaranteed for 10 years, would not pay out any money at death, should death occur after the ten year guarantee.
On the other hand, the illustration used for IncomePlus, a guaranteed minimum withdrawal product, indicated a death benefit guarantee illustrated at $160,744* that could be paid out if death occurred in the 11th year. If death occurred in the 15th year, the death benefit guarantee could still be $109,000*.
The result is potentially more money while living, and potentially more money for beneficiaries, with the new choices available.
Wernham suggests that anyone interested in investigating alternatives and how they might benefit from this announcement, can contact his firm at 519-670-3177.
*The numbers used are for illustration only, and not guaranteed for any future date. The illustration from which these numbers were derived is a representation of an investment in the IncomePlus series, which is available as an option under the GIF Select contract. The benefits illustrated therein included the guaranteed minimum withdrawal benefit and 100% death benefit guarantee. Returns illustrated are net of fund management expense ratios (MERS). These numbers are not guaranteed for any future date. Other conditions apply. See your representative for details.