Americans Have Serious Questions About Funding Their Retirement, But GE Financial has the 'Answer' RICHMOND, Va.--(BUSINESS WIRE)--March 20, 2002--GE Financial (NYSE: GE) Revolutionary GE Life & Annuity retirement product guarantees the amount of money you want, when you want it - with only upside potential GE Financial, the consumer insurance and investment arm of GE Capital Services, today introduced one of the most innovative financial products ever developed - the GE Retirement Answer(sm).
This new product, underwritten by GE Life & Annuity, lets consumers select a date at least 10 years away and provides them with guaranteed minimum monthly payments for the rest of their lives. And, importantly, there's only upside potential tied to this offering. That means a policy owner will never get less than they're promised, but they could get more.
Here's how the product works. You pick a date at least 10 years or more into the future. Next, working with your financial professional, you decide exactly how much money you can afford to contribute each month, or on a lump sum basis. Then, providing you make your regularly scheduled payments, you'll receive a guaranteed minimum monthly payment for the rest of your life beginning on the date you selected.
Finally, GE Life & Annuity will also provide you with an opportunity for higher monthly income based on investment performance. In essence, the GE Retirement Answersm offers some of the best features of defined benefit and defined contribution-type plans, yet is a personal and portable retirement vehicle that you own.
Blazing New Territory
GE (NYSE: GE) believes this product breaks new ground in both its structure and simplicity. GE Retirement Answer customers will have their money professionally invested in a well diversified portfolio with several asset classes, giving them the potential to receive more than their monthly guaranteed amounts. These investments will be made by the same organization that has successfully managed GE's pension plan for more than 75 years.
Company officials say 89% of consumers who reviewed the GE Retirement Answer in focus groups last year said they would be interested in buying the product if it were available. Independent research by Roper that GE Financial commissioned on Americans' retirement planning helps explain why the GE Retirement Answer has proved so popular in initial discussions with both consumers and financial professionals.
A Looming American Crisis
In a nationwide survey of people between 18-and-65 years of age, 43% said their companies did not offer 401(k) plans and a staggering 54% said they were not vested in a company pension plan. Yet, almost half the respondents said they expect to live past 80 - and with good reason. U.S. actuarial tables show that for a married couple, both age 65, there is a 60% chance one of them will live to be 90. This increasing life expectancy could require many Americans to fund 25 years of retirement.
Despite growing life spans, 40% of those surveyed said they were saving nothing at all for their retirement; however, that same percentage did admit to either playing the lottery, entering sweepstakes, waiting for an inheritance or getting married as part of their retirement funding strategy.
Other findings from the research show that 32% of respondents have already worked for 5 or more companies in their lifetimes. And many people, especially in the 18-34 category, said the reason they're not saving for retirement is because it's simply too complicated.
In response to these kinds of findings, the GE Retirement Answer was designed to make saving for retirement as easy and simple as possible. For example, with this product, it no longer matters what company a person works for or how much money a person makes. All consumers need is a commitment to begin saving and a financial planner to work with.
Who's Selling It Today
GE Financial says 30 major financial firms have signed a 60-day exclusive agreement to sell the GE Retirement Answer. These firms include, First Union Securities, Raymond James & Associates, Inc., Raymond James Financial Services, Inc., H&R Block Financial Advisors,
Inc., SunTrust Securities, McDonald Investments - Key Bank, Legg Mason, ABN AMRO Financial Services, Inc., Fleet / Quick & Reilly, Jefferson Pilot Securities Corporation, U.S. Bancorp Piper Jaffray, First Horizon Investment Services, a Division of First Tennessee Brokerage, Inc., Commonwealth Financial Network and RBC Dain Rauscher.
The product will be more broadly available in May.
We knew we had created a financial solution that was truly special, but we had no idea how overwhelmingly positive the response would be from financial professionals across the industry, said Michael D. Fraizer, President & CEO of GE Financial. Virtually every intermediary we spoke with believes in this product as much as we do - in fact, a number of them told us they're going to buy it themselves. They also understand why its innovative structure makes it a great fit for many of their clients.
Providing customers make their regularly scheduled payments, the GE Retirement Answer will produce steady income for life, or for up to 50 years to a designated beneficiary. To help GE Retirement Answer policy owners meet their own funding commitments, a number of riders are offered for unemployment, disability and death.
(For more complete product details, please see the addendum to this release.)
GE Life & Annuity Assurance Company, the underwriter of the GE Retirement Answer variable annuity, is a GE Financial company. GE Financial provides products and services that help people invest, protect and retire. Offerings are sold through multiple distribution channels and include: life insurance, annuities, mutual funds, retirement investment plans, long term care coverage, supplemental employee benefits, auto coverage, and life style enhancement products like roadside assistance and pre-paid legal services. Headquartered in Richmond, Virginia, GE Financial operates in 17 countries and has $120 billion of assets under management. To learn more, visit www.gefinancial.com.
ADDENDUM to GE Retirement Answer press release GE Retirement Answer is a variable annuity issued by GE Life and Annuity Assurance Company, 6610 West Broad Street, Richmond, VA 23230.
Principal Underwriter: Capital Brokerage Corporation (dba GE Capital Brokerage Corporation in MN, IN, NM and TX), 6630 West Broad Street, Richmond, VA 23230.
Member NASD/SIPC
GE Life and Annuity Assurance Company, GE Asset Management Inc. and Capital Brokerage Corporation are members of the GE Financial family of companies. All guarantees are based on the claims-paying ability of GE Life and Annuity Assurance Company and depend on all required payments and other contract requirements being satisfied. If all of the required payments are not made, you will still receive income payments beginning on the date you chose, however you lose your minimum guarantee therefore, your payments could be lower. Your income payments will vary based on the performance of the Sub-account.
The fees and expenses for GE Retirement Answer are an annualized asset-based charge of 1.50%, and a portfolio management expense (currently 0.54%) which are deducted from assets in the Sub-account daily.
Variable annuities are long term investment vehicles designed for retirement purposes. For GE Retirement Answer, early distributions/surrenders may be subject to surrender/access charges, a market value adjustment, ordinary income taxes and, if taken prior to age 59 1/2, a 10% penalty tax may also apply. Early distributions reduce the death benefit and cash surrender value, and may forfeit theGuaranteed Minimum Income Payment.
Variable annuities are sold by prospectuses, which contain more complete information including risk factors, fees and surrender charges and other costs that may apply. Prospectuses are available from your registered representative or by calling 1-800-ThinkGE. Please read the prospectuses carefully before investing or sending money.
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