Deferred Annuities Clause Samples
A Deferred Annuities clause outlines the terms under which annuity payments are postponed until a future date, rather than beginning immediately. Typically, this clause specifies the length of the deferral period, the conditions for starting payments, and how interest or investment returns accrue during the waiting period. Its core practical function is to allow individuals to accumulate funds over time before receiving regular income, often for retirement planning, thereby providing a structured way to delay payouts and potentially increase future benefits.
Deferred Annuities. Deferred annuities typically have two phases, the “accumula- tion” phase and the “distribution” phase. During the accumu- lation phase, your money is invested and has the opportunity to grow on a tax-deferred basis. The second phase is known as the distribution or “an- nuitization” phase. During this phase, you receive either a lump sum or periodic income payments from the insurance company. Like immediate annuities, a deferred annuity in its distribution phase can offer income guaranteed for one life, two lives, or a specified period of time. Annuity companies may offer one or all of the types below.
Deferred Annuities a. Foreign Service employees who are separated under RIF and who are not eligible for an immediate annuity but who have at least five (5) years of credit toward retirement, may elect to receive an annuity in accordance with applicable statutes and regulations. In accordance with current applicable statutes and regulations, this deferred annuity will commence at age 60.
b. In lieu of deferred annuities, Foreign Service employees may elect to receive a refund of the contributions they made in accordance with applicable statutes and regulations. APPEAL AND GRIEVANCE PROCEDURES