The Personal Income BenefitSM is a “pension-like” plan benefit, available through the EQUI-VEST® series of variable annuities, which provides guaranteed withdrawal payments and helps employees be more confident about retirement. No matter what happens in the market, the retirement income amount can only go up.*
AXA believes that education is a key step toward addressing your financial goals, and we've designed this material to serve simply as an informational and educational resource. Accordingly, the information on this website does not offer or constitute investment advice and makes no direct or indirect recommendation of any particular product or of the appropriateness of any particular investment-related option. Your needs, goals and circumstances are unique, and they require the individualized attention of your financial professional. But for now, take some time just to learn more.
EQUI-VEST is a variable deferred annuity designed for retirement purposes. There are contract restrictions, limitations, fees and charges associated with annuities, which include, but are not limited to, mortality and expense risk charges, sales and withdrawal charges and administrative fees. A financial professional can provide EQUI-VEST cost information and complete details. Variable annuities are subject to market risk, including loss of principal.
*Early withdrawals from the Personal Income Benefit account value or withdrawals from the Personal Income Benefit account value that exceed the Guaranteed Annual Withdrawal Amount may significantly reduce or eliminate the value of the Personal Income Benefit.
The Personal Income Benefit is an optional feature available to employees between the ages of 45 and 85 for an additional fee. It can help turn retirement savings into an annual withdrawal benefit. There are three ways to build guaranteed income with the Personal Income Benefit option:
- Direct salary deferral
- Increases due to any gains in account value from market growth
- Transfers from other investment options and/or direct transfers/direct rollovers from previous retirement plans
How will you supplement your retirement savings?
Explore how different contribution rates, transfers and retirement ages could affect future lifetime income payments.
Make the most of the Personal Income Benefit
Employees should complete the steps on the checklist below to start building a supplemental source of retirement income.
1. Determine how much to contribute (visit our calculator for assistance).
☐ Choose when and how much you want to contribute.
☐ Change your contribution amount at any time.
2. Select the Personal Income Benefit variable investment option to invest in.
☐ AXA Moderate Growth Strategy.
☐ AXA Balanced Strategy
☐ AXA Conservative Growth Strategy
☐ AXA Conservative Strategy
☐ EQ/AB Dynamic Wealth Strategies
3. Decide contribution amounts or assets to transfer.
☐ Set direct salary contributions.
☐ Transfer from other investment options.
4. Submit this information on the “Personal Income Benefit Activation Form” attainable from a financial professional or by contacting a customer service representative.
The Personal Income Benefit investment option is available to employees between the ages of 45 and 85.
- The Personal Income Benefit feature is not appropriate if employees do not intend to take withdrawals prior to annuitization.
If your employer chooses not to offer the Personal Income Benefit investment option, you can elect one of the available distribution options under the plan.
As with other retirement plan investment options, there are three ways to contribute:
- Make ongoing salary deferrals or a one-time contribution
- Transfer funds from other plan investment options
Transfer balances from other retirement plans
Payments can be taken at any time after age 59½ (subject to plan rules). The age at which payments begin will affect the amount of the Guaranteed Annual Withdrawal Amount (GAWA). Additional contributions or transfers cannot be made after the GAWA payments begin.
Maintaining the guarantee
Employees shouldn’t make early or excess withdrawals from their Personal Income Benefit account value. This may significantly reduce or eliminate the value of the Personal Income Benefit.
There is an annual fee that covers the cost of providing the guarantee equal to 1% of the Personal Income Benefit account value.
Guaranteed Withdrawal Rate
The Guaranteed Withdrawal Rate is a percentage, based in part on the “10-Year Treasuries Formula Rate” plus an age-based spread. It will vary depending on the date the contribution or transfer is made, the nature of the contribution or transfer, and the employee’s age at the time the contribution or transfer is made. Guaranteed Withdrawal Rates applied to contributions are set each quarter. Guaranteed Transfer Withdrawal Rates applied to transfers are set each month. Both can be as high as 7% but neither will be less than 2%.
Guaranteed Annual Withdrawal Amount (GAWA)
The Guaranteed Annual Withdrawal Amount (GAWA) is determined by multiplying any contribution(s) by the applicable Guaranteed Withdrawal Rate plus any transfer(s) multiplied by the applicable Guaranteed Transfer Withdrawal Rate, plus any GAWA Increase.1
Annual increases to GAWA
The GAWA will increase with each new contribution or transfer. It can also increase based on the investment performance of the Personal Income Benefit variable investment options. To determine any GAWA Increase, we take the Income Base1 (which equals all contributions and transfers plus any previous GAWA Increases1) and compare it with your Personal Income Benefit account value on the contract anniversary. If the Personal Income Benefit account value is higher, the Income Base will step up to equal the Personal Income Benefit account value. This increase, which will be multiplied by a weighted average rate (GAWA divided by the previous Income Base), equals your GAWA Increase.1
1 In the prospectus, GAWA Increase is called Annual Ratchet Increase, Income Base is called Ratchet Base, and Income Base Increase is called Ratchet Amount.
Important Information about the Personal Income Benefit
All contributions into the Personal Income Benefit generate a Guaranteed Annual Withdrawal Amount (GAWA). The GAWA is the amount employees can receive in income each year once they begin taking payments. The GAWA increases are based on:
- Direct salary deferrals into the Personal Income Benefit variable investment options
- Investment gains in the Personal Income Benefit account value, if any
- Transfers from other investment options and/or direct transfers/rollovers from previous retirement plans
Each contribution generates a new GAWA based on the amount of the contribution, the Guaranteed Withdrawal Rate in effect, and the employee’s age at the time of the contribution, which is added to the current GAWA amount. This allows employees, at any time, to see how much their future guaranteed income amount will be.
The Guaranteed Withdrawal Rate is calculated using the "Ten-Year Treasuries Formula Rate." The rate can be as high as 7%, and will never be less than 2.5%.
The Guaranteed Withdrawal Rate is applied to all payroll contributions that are periodically remitted to the Personal Income Benefit variable investment options, which include pre-tax and Roth contributions. Employer contributions can also be allocated to this feature (if offered under the plan).
In its sole discretion, AXA Equitable may declare a rate greater, but not less than the rate generated by the Guaranteed Withdrawal Rate calculation.
|Guaranteed Withdrawal Rate Effective January 1, 2018 – March 31, 2018|
The Guaranteed Transfer Withdrawal Rate is set on the first business day of each month. The rate can be as high as 7% and will never be less than 2.5%.
The Guaranteed Transfer Withdrawal Rate is applied to all investment option transfers from the Non-Personal Income Benefit Investment Options to the Personal Income Benefit variable investment options, contributions made in a lump sum (including amounts attributable to contract exchanges and direct transfers from other funding vehicles under the Plan) and rollovers.
|Guaranteed Transfer Withdrawal Rate Effective January 1, 2018 – March 31, 2018|
Like any investment, the Personal Income Benefit account may not be appropriate for all employees. It was designed to provide employees with a guaranteed source of retirement income through a series of withdrawals. Therefore, it would not be appropriate for those who do not intend to take withdrawals prior to annuitization. Employees must be 45 years old to activate the Personal Income Benefit. The benefit is completely optional, has no minimum contribution limit and allows employees to choose whether or how much they want to put into the Personal Income Benefit variable investment options.
Loans are available from the Personal Income Benefit account value, but it is recommended that employees request loan amounts that do not impact the Personal Income Benefit. If an employee requests a loan from the Personal Income Benefit account value, AXA will treat the loan request as an early or excess withdrawal, which may significantly reduce or eliminate the value of the Personal Income Benefit.
Employees can start taking Guaranteed Annual Withdrawal Amount payments any time after they reach age 59½ and have separated from service. Their age will affect how much they’ll receive; payments are reduced if they begin before age 65 and increased if they begin after age 65.
Once employees begin taking Guaranteed Annual Withdrawal Amount payments, no additional contributions can be made to the Personal Income Benefit. The account value will remain invested, with the potential to grow in positive market conditions, which means the Guaranteed Annual Withdrawal Amount also has the potential to increase. Employees’ annual withdrawals cannot decrease unless they take an early or excess withdrawal.
The Personal Income Benefit includes what’s called a Ratchet Base. The Ratchet Base is initially equal to the first contribution or transfer made into the Personal Income Benefit. It will increase dollar-for-dollar with each additional contribution. Then, on the employee’s contract anniversary, we compare the Ratchet Base to the Personal Income Benefit account value. If the account value is greater than the Ratchet Base, the Ratchet Base will step up to that higher amount.
A Ratchet increase will also generate an increase to the employee’s Guaranteed Annual Withdrawal Amount (GAWA). We use this calculation to determine the additional amount that is added to the GAWA: The difference between account value and Ratchet Base x (previous GAWA/previous Ratchet Base) = additional GAWA.
Early withdrawals are withdrawals taken from the Personal Income Benefit variable investment options before an employee has elected to begin receiving Guaranteed Annual Withdrawal Amount payments.
Excess withdrawals are withdrawals greater than the Guaranteed Annual Withdrawal Amount.
Both early and excess withdrawals will significantly reduce the value of the Personal Income Benefit. Employees should understand this before taking a withdrawal. Your financial professional can help explain this in greater detail.
Since Guaranteed Annual Withdrawal Amount payments are not cumulative, employees cannot carry forward any amount they don’t take in a particular year.
If an employee dies before starting Guaranteed Annual Withdrawal Amount payments, or if he or she started payments on a Single-Life basis, the beneficiary would receive the Personal Income Benefit account value.
If the employee dies having started taking payment on a Joint-Life basis, the surviving spouse would continue to receive payments for as long as he or she lives.
Employees can always stop contributions to the Personal Income Benefit at any time by changing their allocation instructions on file. Once the Personal Income Benefit has become active, employees cannot withdraw amounts from the Personal Income Benefit account value until the Personal Income Benefit has been active for at least one full contract year. After a full contract year, an employee can request to transfer amounts out of the Personal Income Benefit, causing an early withdrawal which will significantly reduce or eliminate the value of the Personal Income Benefit.
If an employee leaves the plan and transfers the Personal Income Benefit account value to a new plan, the Personal Income Benefit feature will terminate. To keep the Personal Income Benefit intact, the employee would need to keep their EQUI-VEST contract even if they leave the company. Or, in some instances, they may be eligible to make a direct rollover into an AXA Equitable Rollover GWBL IRA, which will let them maintain the Personal Income Benefit.
EQUI-VEST and the Personal Income Benefit feature may not be available in all jurisdictions or in all plans.
An annuity contract that is purchased to fund a 403(b) plan should be done so for the annuity’s features and benefits other than tax deferral. For such cases, tax deferral is not an additional benefit for the annuity. You may also want to consider the relative features, benefits, and costs of this annuity with any other investment that you may have in connection with your retirement plan or arrangement.
Click here to gain access to the EQUI-VEST prospectus.
Withdrawals from annuities are subject to ordinary income tax treatment and if taken prior to age 59 ½ may be subject to an additional 10% federal income tax penalty. Withdrawals may also be subject to a contractual withdrawal charge of 5% in the first five prior contract years for the Series 201 contract.
AXA Equitable may discontinue the acceptance of, and/or place limitations on, contributions and transfers into the contract and/or certain investment options. Annuities contain certain restrictions and limitations. For costs and complete details, please contact a financial professional.
This page is not a complete description of the Personal Income Benefit or the EQUI-VEST variable annuity.
EQUI-VEST is issued by AXA Equitable Life Insurance Company (New York, NY). Co-distributed by affiliates AXA Advisors, LLC and AXA Distributors, LLC (members FINRA, SIPC). AXA Equitable, AXA Advisors, and AXA Distributors do not provide legal or tax advice. Consult with your attorney and/or tax advisor regarding your individual circumstances.
All guarantees are based on the claims-paying ability of AXA Equitable Life Insurance Company.
Contract form #s: 2006BASE-I-A, 2006BASE-I-B, 2004TSAGAC, 2004EDCGAC, 2008TSAGAC901, 2009EDCGAC901, 2009401aGAC901 and any state variations.
Contract endorsement form #s: 2006BASE-A, 2006BASE-B, 2004TSACERT-A, 2004TSACERT-B, 2004EDCCERT-A, 2004EDCCERT-B, 2008TSA901-A, 2008TSA901-B, 2009EDC901-A, 2009EDC901-B, 2009401a901-A, 2009401a901-B and any state variations.
Certificate endorsement form #s: 2012RDPIB, 2012RDPIBG and any state variations.