Basic Annuity

Investment Objective

The Investment Objective of the Basic Annuity is to produce long-term returns at the embedded 4% annual return assumption. The assets supporting the basic annuity are invested in fixed-income securities that reflect high overall quality ratings.

Benefits are expected to remain relatively constant over time, but could change with an extended period of returns higher or lower than the embedded 4% for the underlying portfolios.

Investor Profile

The Basic Annuity is suitable for persons who are seeking stability of income through investment in a portfolio of exclusively fixed-income securities, which has historically been less volatile than investments in global stock markets and other risk assets.

All financial decisions can be evaluated only in hindsight. For this reason, your personal sense of security and risk tolerance must be your own guide in making this choice. You should consult with your own personal financial advisor in making this decision, so that your individual financial goals and needs may be evaluated.

Fund Investments

Permissible investments in the Basic Annuity Fund include U.S. Treasury securities, government agency bonds, corporate bonds, municipal bonds, mortgage-backed and asset-backed securities, U.S. dollar-denominated foreign bonds, and cash equivalents. The Fund may also invest in senior secured bank loans, high yield bonds, non-investment grade, and emerging market debt securities denominated in U.S. dollar or any other currency within established limits. An average maturity of 5 to 10 years is normally maintained in this Fund.

Predominantly fixed income-based alternative assets may be approved by the Pension Boards Investment Committee.

Annuity Payments

It is not the intention that the benefit from the Basic Annuity will be adjusted upwards or downwards in the near future. There is always a possibility that the benefit will decrease, particularly if interest rates globally stay at low levels for an extended period.

Manager(s) - click here for list of managers
Policy Benchmark Historical Allocation