At its April 2011 meeting the Board of Directors of the American Council on Gift Annuities (ACGA) approved a new schedule of maximum charitable gift annuity rates. The rates are effective for gifts on or after July 1, 2011.
Unlike the past several rate changes which tended to move either up or down in the same direction, the rates on the 2011 schedule trend in different directions for different age groups. The rates for single life annuities on the 2011 schedule are lower for ages 69 and younger, generally the same for ages 70 to 74, and slightly higher for ages 75 and older.
The increase in rates is quite modest at the older ages—from one-tenth of one percent at age 75 to three-tenths of one percent at age 79 and above. The reductions range from one-tenth of one percent at age 69 to four-tenths of one percent at age 60.
For organizations that offer gift annuities at younger ages, the new lower rates will (at the May discount rate of 3% for example) result in a charitable portion greater than 10 percent for a fifty-year old individual. This would have not been the case under the 2010 rate schedule.
1 comment
These annuity rate changes aren't too unexpected. Although it will push people to either enter or back out of their current annuity. Because of this reason we may see a rise in liquidated annuities, only time will tell.
-Jeff
Post a comment: