Posted by N.E.One on 25 December 2000 at 13:30:12:
This latest piece of information about GARs has annoyed me considerably because I started AVCs a little while after Feb 1992.
I looked back in all the documentation and can find no reference to any possibility that pre Feb 1992 AVCs were protected by guaranteed annuity rates. All I can find are statements like "IBM Currently has two AVC plans. The A Plan closed to new members from March 1987 and was replaced by the T Plan which offers similar benefits".
So this makes me wonder what the exact implementation of the GAR with IBM AVCs is, for example:
1.For two people who retire in June 2001, does the person who started AVCs in Dec 1991 get the whole of their AVC fund "annuity rated" at the GAR rate for Dec 1991 and the person who started on March 1992 get the rate for June 2001?
If this is the case then IBM or the Trustees should certainly have advised people of the change. They must have known a few months in advance and also they were duty bound to tell people of such a radical change.
We did not know what contract IBM had made with Equitable and Equitable do not/did not deal with direct enquiries with IBM AVCs.
From reading the media there might be 50% or more difference in the values of the annuities.
2.When you retire, do you get a statement of exactly how the annuity for the AVC is calculated?
3.Has anybody who started AVCs prior to 1992 and subsequently retired actually checked what they got compared with what Equitable were guaranteeing?
4.Or were IBM being very generous and smoothing the effect of the GAR so that employees who joined AVCs later were slightly protected from the change? Is this why they didn't bother to tell me (or seemingly anyone)?
5.What is the annuity rate that you get if you retire, say, in June 2001?
If anyone does have a good understanding of this PLEASE PLEASE add a note correcting me. If there has been info published about GAR and IBM AVCs then, sorry, I did not receive it.
It is about time that much more information is provided by IBM and the Trustees about their arrangements with Equitable.
A Happy but Disgruntled Cristmas