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Annuities for Individuals

Winning range of annuity options for a comfortable pension.

Momentum's Golden Annuities range offers individuals new directions in growth and security - for your financial wellness, peace of mind, and stability, when you are a pensioner.

We want to ensure that your needs for retirement are met; whether it is for a regular income to meet ongoing expenses, to cover medical costs, or to have enough savings for once-off or discretionary costs.

Our annuities are with-profit and inflation-linked; and provide a guaranteed income for life that is increased through participation in future investment and mortality profits. The value for money for a pensioner is dependent on life expectancy.


Fund information
Momentum Golden Growth and Golden Income With-Profit Annuities Open

Momentum's Golden With-Profit annuities provide financial certainty for pensioners along with a choice of initial pension levels and exposure to income growth potential through participation in investment profits. These annuities guarantee that pensions will never decrease and increases will never be taken away.

How it works

Our With-Profit Annuities are policies of insurance; in return for a single premium investment, they pay a regular income for life to the pensioner, spouse and dependants, as specified in the contract terms. This income will increase annually through participation in investment profits, adjusted for mortality profits or losses. The annuity income in payment is guaranteed never to decrease.

Investment profits

The annuity is priced assuming a minimum net investment return, the post-retirement interest rate, or PRI, which is selected by the client. Investment profits arise to the extent that smoothed investment returns exceed the selected PRI.

Fund Objective

The Fund aims to provide increases relative to inflation that are competitive when compared to an inflation-linked annuity.

The level of increases will be determined by the selected PRI (the lower the PRI; the higher the expected increase).

How we aim to achieve the Fund's objective

The with-profit annuity portfolio invests in a balanced fund (Bonus Generating Portfolio) to generate investment returns that determine the pension increases.

The Bonus Generating Portfolio is actively managed with exposure to different local and international asset classes.

We use international best practice risk management technology to protect the Fund against the risk of long-term investment returns falling below the PRI.

This has specific advantages over traditional methods. It allows the Bonus Generating Portfolio greater freedom to invest in growth assets to achieve better long-term investment returns, but with a lower capital charge. The risk of adverse market conditions is managed in advance, rather than being clawed back from future increases.

A Golden With-Profit Annuity is appropriate when:

  • The pension fund increase policy targets (not guarantees) future increases relative to inflation.
  • Instead of purchasing an inflation-linked annuity that guarantees future increases relative to inflation, pensioners can have a higher starting pension and use growth assets to generate increases that may match or exceed inflation over time.

Differentiating features

  • Best practice risk management technology to manage investment risk.
  • Higher exposure to growth assets in the bonus generating portfolio to generate higher expected future increases.
  • Lower ongoing management fees will result in a higher pension increase for pensioners.
Momentum Golden Inflation-Linked Annuity Open

Momentum's Golden Inflation-Linked annuity is aimed at pensioners seeking guaranteed future increases to their initial pensions in line with a stated percentage of Consumer Price Index (CPI) inflation.

How it works

This is a policy of insurance. In return for a single premium investment, the Golden Inflation-Linked Annuity pays a regular income for life to the pensioner, spouse and dependants, as specified in the contract terms. This income will increase annually by a stated percentage of the increase in the Consumer Price Index (CPI) as stipulated in the contract.

Fund Objective

To secure, for pensioners and their beneficiaries, guaranteed future pension increases in line with a stated percentage of CPI inflation.

How we aim to achieve the Fund's objective

Momentum invests in a cash flow matching portfolio of assets that guarantees future increases in cash flow equal to a stated percentage of CPI inflation.

It is impossible to find a portfolio of assets with sufficient duration to fully match these liabilities. Therefore, in addition to this, Momentum guarantees that it will continue to provide CPI-linked pension increases:

  • on portions of the portfolio that cannot be precisely matched;
  • if the assets in which it invests default;
  • if pensioners live longer than anticipated by assumptions used in its pricing basis.

Momentum is able to provide this guarantee because it uses sophisticated risk and capital management techniques to ensure that the company carries sufficient economic capital to demonstrate its financial soundness, measured against both the external stakeholders' requirements (regulator, credit rating agencies, bond holders, shareholders) and the Board’s risk appetite. This allows for the full and diversified nature of risks carried by the company.

This is fully priced into the quotation provided for underwriting the pension liabilities, with increases linked to CPI.

Golden Inflation-Linked Annuity is particularly appropriate when:

  • An individual would like pension increases which guarantee (not target) future increases in line with CPI inflation.
  • The individual can afford to purchase a higher initial pension at the date of outsourcing that offsets the impact of future pensioner inflation exceeding CPI inflation.
  • An individual seeking to secure guaranteed future pension increases in line with a stated percentage of CPI inflation should consider investing in an inflation-linked annuity.

In making this decision, individuals and advisors should consider the following:

  • Medical-related inflation forms a significant component of pensioner inflation and generally exceeds CPI inflation.
  • There is a limited supply of assets that are specifically linked to CPI inflation, which makes it expensive to secure full CPI-inflation linkage.
  • The individual pays Momentum a premium for providing a guarantee on future longevity and for holding capital to underwrite the CPI-linked guarantee.

Differentiating features

  • Pension and increases guaranteed by Momentum to be in line with a stated percentage of CPI inflation.
  • Pricing that takes into account the guarantees provided and the assets necessary to provide the guarantees with the least risk to the pensioner.
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