Product Specification#

Status: Draft, 2026-08-04 (all cited sources accessed 2026-08-04).

Scope note. This is a standardized composite specification assembled for reference liability cash-flow modeling. It does not describe any single insurer’s product. Facts carrying a source tag — [S#] (primary product documents) and [R#] (regulatory/actuarial references), both numbered per _research/immediate-annuity.md, and [REG-R#] (the cross-product reference library references/regulatory-and-actuarial-references.md, one shared numbering space now running R1–R157 with most of the R73–R149 block unused: R1–R34 from _research/regulatory-actuarial.md, R35–R72 from _research/regulatory-actuarial-annuities.md, and R150–R157 from the AP&P Manual appendix reading of 2026-08-06, of which R151 (AG 33) and R153 (A-820 with A-821 and A-822) are cited here) — were extracted from the cited document. Values marked std are standardizations introduced for the reference implementation; each std table row carries a footnote giving the rationale and the observed range across insurers. Facts the research file could not verify are flagged unverified.

The design anchor is MassMutual RetireEase (form SPIA05; SPIA05 (NC)) S1 combined with Pacific Income Provider (form series ICC10:30-1181, 30-1181OR) S2 S3. Pacific Life supplies the cleanest published statement of the two joint-life reduction triggers; MassMutual supplies the only published SPIA surrender-charge schedule and the 1–4% compound COLA menu.

Product overview and market role#

A SPIA converts a single premium immediately into a payment stream. Income must begin within a short window: 12 months S1 S5, one year S2 S3, 13 months S8; a state regulator frames it as income “starting no later than one year after you pay the premium” R11, Guardian as “typically within a month (and never more than one year out)” S11. Once issued the contract is irrevocable, has no account value, no cash surrender value, and cannot be surrendered S4 S5; MassMutual: “there is no accumulation or cash value — and, therefore, limited liquidity” S1. Income option, frequency and every optional feature are fixed at issue S2 S3 S5; the one general exception is the period certain only form, whose certain period may be lengthened or shortened after the first contract year S1. Both qualified (Traditional / SEP / Custodial / Roth / inherited IRA) and nonqualified money is accepted S1 S2 S4 S5. More than $3.6 billion of SPIAs were sold in Q1 2024 S11.

Position in this library. This is the payout chassis for the U.S. annuity family: the same survival-indexed payment engine serves deferred income annuities (which prepend a deferral period), annuitizations of deferred-annuity account values, supplementary contracts and pension risk transfer — VM-22 places all of them with SPIAs in a single “Payout Annuity Reserving Category” R2 REG-R36. Structured settlement annuities are SPIA-shaped but statutorily distinct: under IRC §130 payments must be fixed and determinable and “cannot be accelerated, deferred, increased, or decreased by the recipient”, so no commutation of any kind is permissible, and their valuation mortality basis differs R10 R4. Out of scope.

A closely parallel model exists at uk/products/pension-annuity/technical-notes.md; the payment engine is shared and the U.S. differences are tabulated in technical-notes.md (Model scope). In summary: 2012 IAM Basic with Projection Scale G2 for best estimate and the 2012 IAR generational table for valuation R2 R3 R4 versus the UK’s CMI-restricted proxies; fixed compound COLA only — no RPI/LPI escalation and no CPI-linked option in any retrieved U.S. document S1 S2 S4 S5 S6 S8; cash refund and installment refund S1 S2 S5 versus UK value protection; period certain S1 S2 S4 S5 versus UK guarantee period; and exclusion-ratio taxation under IRC §72 R6 R7 REG-R55.

Representative specification#

Product identity and issue rules#

Parameter

Representative value

Basis

Design type

Single premium immediate fixed annuity; irrevocable; non-participating; no account value

S1 S2 S4 S5

Contract nature

“The owner has no access to the premium… no cash value, no death benefit and the annuity can’t be surrendered” (base form, before refund/certain options)

S4

Market types

Nonqualified and qualified (Traditional / SEP / Custodial / Roth / Beneficiary IRA)

S1 S2 S4 S5

Market type in base model

Nonqualified

scope std (1)

Issue ages — lifetime forms

18–90

S1; S2 max 90; band std (2)

Issue ages — period-certain-only form

to attained age 100

S1

Age basis

Age nearest birthday (“74 years, six months and one day old ⇒ contract age 75”)

S1

Annuity date (first payment date)

Within 12 months of issue; base model sets annuity date = issue date

S1 S5; simplification std (3)

Changes after issue

None; exception: certain period on the period-certain-only form may be altered after year 1

S2 S3 S5; exception S1

Anchor model point (used in both documents)

Premium $100,000; joint form; primary male ANB 65, joint annuitant female ANB 62; monthly in arrears; survivor percentage 66⅔%; 3% compound COLA; no certain period

std (2)(5)(6)(8)(10)(13)

Premium and income#

Parameter

Representative value

Basis

Single premium — minimum

$10,000

S1 S4 S5 S6; S2 $25,000; choice std (4)

Single premium — maximum without insurer approval

$2,000,000

S2 S4 S5 S6; S1 $1.5M; choice std (4)

Minimum scheduled periodic payment

$100

S1 S4 S6

Payment frequency menu

Monthly, quarterly, semiannual, annual

S1 S2 S4 S5 S6 S8

Payment frequency — base model

Monthly

choice std (5)

Payment timing — base model

Arrears

std (6)

State premium tax deducted from premium

0.00%

mechanism S6 S7 S11; rate std (7)

Initial annual income — anchor cell

$6,000 per $100,000 premium = $500.00/month

std (8)

Explicit policyholder charges

None — “there are zero fees”

S1

Payout forms#

Parameter

Representative value

Basis

Single-life forms

Life only; life with period certain; life with cash refund; life with installment refund

S1 S2 S4 S5

Non-life-contingent form

Period certain only

S1 S2 S4 S7 (not offered on S5’s lifetime-income form)

Period certain range / base default

5–30 years / 10 years

range S1 S2 S4 S5 S7; default std (9)

Joint reduction trigger

Switch — reduce on death of EITHER annuitant, or on death of the PRIMARY annuitant only

S1 S2 S3 S7

Survivor percentage menu

50%, 66⅔%, 75%, 100%

S1 S2 S5 S6 S7; set std (10)

Joint × guarantee combinations

Each trigger available as Only / with Period Certain / with Cash Refund / with Installment Refund

S2; S1 crosses the two triggers with No Refund / Installment Refund / Period Certain only

Cash refund benefit

Lump sum at death = max(0, premium − cumulative income payments received)

S1 S3 S5

Installment refund benefit

Scheduled payments continue until cumulative payments equal the premium

S1 S4 S5 S6

Guaranteed period implied by a refund form

premium ÷ annualized income benefit amount

S5

Survivor reduction during a certain period

Full unreduced instalment continues to the end of the certain period; reduction takes effect at the later of the triggering death and the certain-period end

S5; adoption std (11)

Temporary life; % -of-premium death benefit; pre-first-payment return of premium

Out of scope

S4 S5 S2; scope std (12)

Cost-of-living adjustment (COLA)#

Parameter

Representative value

Basis

COLA menu / base model

1%, 2%, 3%, 4% compound / 3.00%

S1 S5; S2 2–4%, S4 1–5%, S6 1–3%, S8 up to 6%; choice std (13)

Application

Automatic increase on each anniversary of the annuity date; elected at issue; not cancellable or changeable; annually compounded

S1 S4 S6

Reduction base

δ applies to the current income payment, so the survivor’s payment escalates too

S2

Index-linked (CPI/RPI) escalation

None offered — no CPI-linked COLA found in any retrieved U.S. product document

survey of S1 S2 S4 S5 S6 S8; permitted for qualified money by R8

Not available with

Life with Installment Refund

S1

Qualified-money ceiling on constant-percentage increases

Strictly less than 5% per year

R8

Liquidity: commutation and surrender charges#

Parameter

Representative value

Basis

Eligibility

Forms including a period certain only; after the first contract year; one withdrawal per contract year; not for contracts issued in Oregon

S1

Withdrawal minimum / residual constraint

$5,000 / each remaining guaranteed payment ≥ $100

S1

Withdrawal maximum

PV of all remaining period certain payments, less surrender charges

S1

Surrender charge (% of amount withdrawn) by contract year

yr 2: 8%; 3: 7%; 4: 6%; 5: 5%; 6: 4%; 7: 3%; 8: 2%; 9: 1%; 10+: 0%

S1

Effect on life-contingent payments after the certain period

None

S1 S2 S5

Commutation discount basis

Compound annual j(t) = 4.00% + (10-yr CMT(t) − 10-yr CMT(0))

std unverified (14)

Cash surrender value

None

S1 S4 S5

Nonforfeiture minimum

None — immediate annuities are expressly outside Model #805

R5 REG-R42

Payment acceleration features

Out of scope

S2 S5; scope std (15)

Footnotes to std rows#

  1. Nonqualified keeps the projection free of the RMD overlay. Qualified adds: period certain capped near 10 years (9 for an inherited IRA) S2 R8; installment refund unavailable S2; non-spouse survivor percentage capped by the MDIB table, 52% at a 40+ year age gap up to 100% at ≤ 10 years R8; constant-percentage COLA < 5% R8; and shortening of remaining payments to the 10-year post-death distribution period S1 S5.

  2. Observed lifetime-form issue ages: 18–90 S1; max 90 S2; 0–85 individual with one joint annuitant to 90 S4; 0–95 nonqualified / 18–89 qualified S5; through 85 S6; 0–85 S8. 18–90 is the intersection of the two anchors. VM-V’s own representative cell set uses single-life ages 55, 60, 65, 70, 75, 80, 85, 91 R1 — a good default age grid, and the source of the anchor cell’s primary age 65. The joint annuitant’s age 62 is a plain std three-year gap, chosen to stay inside the qualified “no more than 10 years younger” joint-annuitant rule S2 so the same cell can be re-run as qualified.

  3. Up to 12 months’ deferral is permitted S1 S5. Collapsing the annuity date onto the issue date removes a short pre-income period carrying a death benefit at one insurer only (Pacific Life pays return of premium on death, or on terminal illness with life expectancy ≤ 12 months, before the first payment date S2). Any nonzero deferral turns this product into the deferred-income-annuity chassis.

  4. Minimum premium clusters at $10,000 S1 S4 S5 S6, Pacific Life the outlier at $25,000 S2. Maximum without approval clusters at $2 million S2 S4 S5 S6, MassMutual at $1.5 million S1; the modal value is adopted. Sub-limits not carried into the composite: $1M to issue age 75 and $500K for ages 76–85 on single-life-only and temporary life S4; $1M for ages 86+ S2.

  5. All six product sources offer the same four-frequency menu; monthly is the frequency in which the published illustrations and rate anchors are predominantly quoted (the one exception is S3’s age-69 cell, quoted annually) S3 S9 S10. Nationwide’s right to reduce frequency if a payment would fall below $100 S6 is not modeled.

  6. No product document states advance versus arrears. VM-V’s prescribed weight-table cash flow model assumes “annuity payments are made at the end of each year” R1 — an annuity-immediate convention — so arrears is the default. The model exposes the choice because it moves the liability by about one payment period’s mortality and interest.

  7. Premium tax is deducted before income is determined at three sources S6 S7 S11, but no source quantifies a rate and state rates were not researched (research gap). τ = 0 in the base, exposed as a parameter.

  8. No insurer publishes payout factors, guaranteed annuity purchase rates, or the pricing basis for a fixed SPIA; pricing is embedded entirely in the quoted payout rate (research gap). 6.00% p.a. of premium is a round arithmetic anchor ($500.00 a month on $100,000), chosen so every figure in the worked example is exact — not a priced rate. The nearest insurer illustration is Pacific Life’s hypothetical Joint Life Only for two 65-year-olds, $230,856 buying $1,200/month = 6.24% annualized (February 2024, “for illustrative purposes only”) S3, but that cell carries no COLA, and a COLA materially reduces the initial payment S1 S2 S3 S4: Pacific’s own single male 65 with 3% Inflation Protection runs at ≈5.28% against ≈7.97% for an un-escalated male 65 in the broker survey S3 S9 — a reduction of about a third. Scaling the 6.24% joint anchor by that ratio (≈4.1%) and allowing an uplift for the 66⅔% survivor percentage against the illustration’s implied 100% puts a 3%-COLA joint 65/62 cell nearer 4.5%. The 6.00% level is therefore deliberately generous relative to the COLA-adjusted anchors and must be replaced by a real quote before any output is read as a price; B(1) is an exogenous input, not a model output. Weaker anchors, context only: Life with 10-Year Period Certain at 69 ≈7.11%, single life male 65 with 3% Inflation Protection ≈5.28% initial rising from ≈$900 to ≈$1,600/month over 20 years S3; a low-reliability broker survey (July 2026, best of 8 carriers per $100,000, life only) giving male 65 $664/month = 7.97%, female 65 $635, joint 65 $583, carrier spread about 5–6% S9; NYL’s weekly “annualized payout as percent of total premium” table, life-with-cash-refund basis, male with $100,000, which is JavaScript-rendered and could not be captured S10. Consequence: no pricing or annuity-rate test against public data is possible for this product.

  9. Certain-period ranges observed: 5–30 years S1 S4 S5 S7, up to 30 S2, 5–20 S6. Ten years is the modal illustrated length S3 S9, sits inside the qualified cap S2 R8, and clears Integrity’s 10-year floor for commutation eligibility S4.

  10. Observed survivor menus: 50/67/75 S2; 1/2, 2/3, 3/4 S1; two-thirds or one-half by contract form S7; 50/100 S6; continuous 40–99 S5. The discrete set {50, 66⅔, 75, 100} covers essentially the whole market; 100% is included because refund forms frequently require it (NYL’s Joint Life with Cash Refund is available only if the survivor’s income is 100% S5) and because the legacy “joint and 100% last survivor” form is still in the market S6.

  11. Only NYL addresses the interaction: “if the first annuitant dies during the guaranteed payment period, the payments to the second annuitant will not be reduced until the end of that period”, restated as the later of first death and the guaranteed-period end S5. Neither anchor states a rule, so NYL’s is adopted. It costs nothing to implement: because the certain floor pays the full, unreduced instalment, the max(certain floor, life-contingent factor) construction in technical-notes.md reproduces the deferral automatically. The alternative reading — a certain floor set at the reduced level — is supported by no retrieved document and is not implemented.

  12. Each was found at a single insurer: temporary life payouts (5–30 years, income only while the annuitant lives, no benefit on or after death), Integrity only S4; Life with Percent of Premium Death Benefit (25% or 50% of premium), NYL only S5; the pre-first-payment return-of-premium death benefit, Pacific Life only S2.

  13. The 1–4% compound menu is modal S1 S5 and the only menu that works for both qualified and nonqualified money under the sub-5% constant-percentage rule R8. Three percent is the upper-middle rung of that menu, the rate common to every observed menu S1 S2 S4 S5 S6 S8, and the rate in the only retrieved COLA illustration S3.

  14. No fixed SPIA issuer publishes a commutation discount formula (research gap). MassMutual caps the withdrawal at “the present value of all remaining period certain payments, less any surrender charges” without stating a rate S1; Pacific Life discloses only that “an interest-rate adjustment will apply” S2; NYL names the change in the 10-Year Constant Maturity Treasury (CMT) Index between purchase and election as the driver but gives no formula S5. The only explicit formula found anywhere is TIAA-CREF Life’s, on a 2008 variable contract: for the fixed account “the commuted value is the sum of payments less the interest that would have been earned from the effective date of the commuted value calculation to the date each payment would have been made” — a simple-interest discount — with 4% (the assumed investment return) on variable accounts S7. The composite therefore assumes a compound discount at a base 4.00% S7 moved one-for-one with the 10-year CMT change S5. Both level and functional form are a modeling invention: std and unverified. A simple-interest variant per S7 is offered as a switch in technical-notes.md.

  15. Excluded to keep the payment engine schedule-driven: Pacific Life’s Income Payment Acceleration (3× or 6× the monthly payment as a lump sum after 59½ and five years of payments, then no payments for three or six months, max two uses) S2 S3; NYL’s Payment Acceleration (six months of income at once, then five months of nothing, twice) S5. Both borrow forward from the schedule with no PV discount.

Contractual mechanics#

Premium and income determination#

A single premium P is paid at issue; where a state levies premium tax it is deducted before income is determined S6 S7 S11, so the amount annuitized is P_net = P × (1 − τ). The insurer converts P_net into a level annualized income B(1) using an unpublished payout factor depending on form, annuitant age(s) and sex, certain period and COLA election. No retrieved document discloses the mortality table, interest rate or expense loading behind that factor S1–S6 S10; NYL states only that its published payout rates “include both interest and return of principal” S10. Structural regularities across every anchor: payout rate rises with age, female below male at the same age, joint below single, certain periods and refund guarantees reduce income, and a COLA materially reduces the initial payment S3 S9 S10. NYL flags one genuine non-monotonicity: “there are limited situations (primarily younger annuitants) where the same or essentially the same income payment is available for longer guarantee periods or cash refund options” S5.

The five payout forms#

With inst the scheduled instalment (annualized income ÷ frequency) and G(t) cumulative income payments made through t:

  1. Life only — instalment at each payment date while the annuitant lives; nothing on or after death S1 S2 S4 S5.

  2. Life with period certain — instalment at every payment date in the certain period regardless of survival, and thereafter while the annuitant lives: an annuity-certain floor under a life annuity S1 S2 S5. On death within the certain period the beneficiary may generally elect the remaining scheduled payments or a lump-sum present value S1 S5 S6 S7.

  3. Life with cash refund — life-only payments plus a lump sum at death of max(0, P − G(death)), “your original purchase payment minus the total income payments received” S3; nothing further once payments equal or exceed the premium S5.

  4. Life with installment refund — the same shortfall paid as continuing scheduled payments until cumulative payments equal the premium S1 S4 S5 S6. NYL gives the implementable equivalence: guaranteed payment period = premium ÷ annualized income benefit amount S5, so this form is a life annuity with a derived certain period.

  5. Period certain only — payments for a chosen 5–30 year term, no life contingency S1 S2 S4 S7. (NYL’s lifetime-income form does not offer it; its option list is life-contingent throughout S5.)

Joint-life structure — the two reduction triggers#

The sharpest structural variation in the U.S. market, modeled as a switch, not a footnote. Pacific Life draws the line in the option names themselves: “Joint Life” options — “Income payments can be reduced to 50%, 67%, or 75% of the current income payment upon the death of either annuitant” S2, restated as “Payments can be reduced upon either person’s death (Joint Life option)” S3; “Joint and Survivor Life” options — “…reduced to 50%, 67%, or 75% of the current income payment upon the death of the primary annuitant” S2, so the secondary annuitant’s death changes nothing while the primary lives. MassMutual offers the same choice under per-option names — Reduction at Death of Annuitant versus Reduction at Death of Either Annuitant, each crossed with No Refund / Installment Refund / Period Certain, reductions of 1/2, 2/3 or 3/4 S1 — and TIAA-CREF Life’s contract names encode the identical asymmetry: Two-Thirds Benefit While Either Annuitant Survives versus One-Half Benefit While Second Annuitant Survives First Annuitant S7. Two consequences: the reduction applies to the current income payment S2, so a COLA keeps escalating the underlying level and the survivor’s payment with it; and under the primary-death trigger, if the secondary dies first 100% continues while the primary lives — NYL makes this mandatory for qualified contracts with a non-spouse joint annuitant S5.

Cost-of-living adjustment#

B(y) = B(y−1) × (1 + g),   y ≥ 2,   g ∈ {1%, 2%, 3%, 4%}

Applied automatically on each anniversary of the annuity date S1, “annually compounded” S4; elected at issue, not cancellable or changeable, and it reduces the initial payment S1 S2 S4. NYL instead starts the increase “one year after the first income payment” and requires the owner to be at least 59½ at the first payment S5; Nationwide applies it to “the fixed payment level for the following year” on each contract anniversary and makes the election irrevocable S6. Integrity warns that “if annuitant dies prior to life expectancy, a payee may receive less total income with an IPO than without one” S4.

Commutation and withdrawals#

Withdrawals exist only on options that include a period certain S1. On the composite (MassMutual) design: one full or partial withdrawal each contract year after the first on Period Certain Only; one partial withdrawal per year on Single or Joint Life with Period Certain, reducing the period-certain payments but not the lifetime payments after the end of the period certain; minimum $5,000; maximum the present value of all remaining period certain payments less surrender charges; each remaining guaranteed payment at least $100; not permitted in Oregon; surrender charge grading 8% in contract year 2 to 1% in year 9 and 0% from year 10 S1. The insurer-side present value is not disclosed by any fixed SPIA issuer (footnote 14). Three published behaviors a model must reproduce:

  • Payments through the end of the guaranteed period are reduced by the withdrawal percentage elected, and if the annuitant is alive at the end of that period full payments resume for life S5; Pacific Life states the same resumption rule for every form except pure Period Certain S2.

  • An interest-rate adjustment applies S2, driven by the change in the 10-year CMT between purchase and election S5 — the SPIA analogue of an MVA.

  • On death within a certain period the beneficiary may take the remaining scheduled payments or their lump-sum present value S1 S5 S6 S7; Integrity sells this as a Deceased Commutation Rider (ICC09 ER.02 0901) alongside a Living Commutation Rider (ICC09 ER.01 0901) paying 10%–90% of the PV of all remaining payouts after year 1 S4.

No cash value, no nonforfeiture floor#

There is no account value, no cash surrender value and no minimum paid-up benefit S1 S4 S5. This is not a design choice: immediate annuities are expressly excluded from the scope of the Standard Nonforfeiture Law for Individual Deferred Annuities (Model #805) §2.A, alongside variable annuities, investment annuities, deferred annuities after payments have commenced, and reversionary annuities R5 REG-R42; the Variable Annuity Model Regulation (#250) §7.A carves out the same list REG-R43. The modeling consequence is that there is no nonforfeiture minimum to track alongside the payment stream — the single most important difference from the deferred products in this library, whose minimum nonforfeiture amount is a live state variable.

Riders and options#

In scope (modeled): the COLA escalation S1 S2 S4 S5 S6; the period-certain and refund guarantee structures, which are payout forms rather than riders S1 S2 S5; and certain-portion commutation with its surrender charge S1.

Described but out of scope:

  • Pacific Life Future Adjustment Option — one-time scheduled income change, amount and date chosen at issue: increase up to 3× the initial payment or decrease up to ½; unavailable with joint options carrying a reduced benefit; an increasing adjustment is unavailable on qualified contracts S2 S3. NYL Changing Needs Option — one-time increase of 1%–400% (up to 5×) or decrease of 1%–50%, on or after the third anniversary of the income start date, fixed at purchase, nonqualified only S5.

  • NYL Income Enhancement Option — one-time, index-triggered increase after the fifth anniversary if the 10-Year CMT in the third full week of the preceding month is at least 2 percentage points above its level before the policy date; amount fixed at issue S5. The only index-linked income feature in any retrieved SPIA; no retrieved SPIA had caps, participation rates, spreads, buffers or floors.

  • Payment acceleration S2 S3 S5 (footnote 15). NYL 30% Cash Withdrawal — commutation against life expectancy on a life-only contract, 30% of the discounted value of remaining expected payments based on life expectancy at purchase, exercisable on the 5th, 10th or 15th anniversary, permanently cutting all future income by 30% S5; the only retrieved feature that commutes a life-contingent stream.

  • Impaired-risk features — Mutual of Omaha’s “age rating available” on Ultra-Income, plus 10%/20% payment increases for health condition, a 50% increase for nursing home confinement and a survivor continuation option on Income Access S8. From a 2017 producer document whose successor brochure 404s; re-verify before relying on it. AG 9-C governs valuation of substandard contracts and VM-V’s “initial age” accommodates a rated age R1 REG-R41.

  • Temporary life payouts (5–30 years, income only while alive, no death benefit), Integrity only S4 — tax-recognized (IRS Tables IV/VIII exist for it R7) but rare; percent-of-premium death benefit (25% or 50%, barred on qualified policies and in New York), NYL only S5; participating / dividend-paying SPIAs, mentioned once S11 with no mechanics located.

How these excluded features would sort under AG 33, if any were added back. The guideline’s two-category test turns on whether a benefit is freely elected, not on its label REG-R151 Definitions 1. Elective, and therefore enough on their own to pull the contract into AG 33’s scope: payment acceleration, the NYL 30% Cash Withdrawal, and the certain-portion commutation already in the composite. Non-elective, and therefore not: the nursing-home confinement increase and the health-condition payment increases on Mutual of Omaha’s impaired-risk designs S8 — AG 33’s non-elective list names “nursing home benefits” expressly, and a benefit payable on a contingent event independent of an owner’s election stays non-elective however large the payment step. This is the correction that matters most for reading older library notes, which had placed nursing-home waivers among the elective set REG-R151.

Variations across insurers#

  1. Survivor-reduction trigger — the sharpest structural variation. Three patterns: (a) explicit two-family designs naming the trigger (Pacific Life’s Joint Life versus Joint and Survivor Life S2 S3; MassMutual’s Reduction at Death of Either Annuitant versus Reduction at Death of Annuitant S1; TIAA-CREF Life’s two-thirds-either versus one-half-second-survives forms S7); (b) a continuous survivor percentage with tax-driven trigger rules (NYL’s 40%–99%, where a spouse joint annuitant on a qualified policy may use either trigger but a non-spouse only the primary-death trigger S5); (c) legacy discrete last-survivor forms (Nationwide’s Joint and 50% / 100% last survivor S6). Chosen: Pacific Life’s design — two triggers × three percentages × four guarantee variants — the cleanest published statement, and it maps directly onto a boolean switch in the payment engine.

  2. Survivor percentage menus. 50/67/75 S2; 1/2, 2/3, 3/4 S1; 2/3 or 1/2 by form S7; 50/100 S6; continuous 40–99 S5. Chosen: {50, 66⅔, 75, 100} (footnote 10).

  3. Certain-period range. 5–30 years is standard S1 S2 S4 S5 S7; the older Nationwide product caps at 20 S6; qualified money is capped near 10 years by RMD rules S2 R8. Chosen: 5–30 with a 10-year default.

  4. COLA menus. 1–4% modal S1 S5; 2–4% S2; 1–3% S6; 1–5% compound S4; up to 6% S8. No CPI-linked option was found anywhere. Chosen: 1–4% fixed compound — the only menu working for both qualified and nonqualified money under the sub-5% rule R8.

  5. Liquidity — where designs diverge most. None: Integrity’s base contract S4; TIAA-CREF Life’s life-contingent contracts, where “no lump sum payment is available during the lifetime of annuitant(s)” S7. Certain-period-only, charge-bearing: MassMutual — one withdrawal a year, $5,000 minimum, capped at the PV of remaining certain payments, with the 8%-to-1% nine-year surrender charge, the only published SPIA surrender-charge schedule found S1. Percentage-band rider: Integrity, 10%–90% of PV after year 1, excluded on life-only, temporary life and certain periods under 10 years S4. Full PV commutation with income resumption: Pacific Life, up to 100% of PV, unlimited withdrawals S2 S3; NYL’s 100% Cash Withdrawal, once S5. Against life expectancy: NYL only S5. Oregon is repeatedly carved out of withdrawal features S1 S2; New York out of Integrity’s commutation riders S4 and NYL’s percent-of-premium death benefit S5. Chosen: MassMutual’s design — the only one with a published charge schedule, and confining commutation to the certain (non-life-contingent) portion keeps the mortality and liquidity models separable.

  6. Minimum premium ($10,000 cluster S1 S4 S5 S6 versus $25,000 S2; chosen $10,000) and death benefits before income starts (only Pacific Life publishes a pre-first-payment return-of-premium benefit, extended to terminal illness with ≤ 12 months’ life expectancy S2; excluded with the deferral window, footnote 3).

  7. Vintage caveat. Nationwide INCOME Promise S6 is a 2004 document; the TIAA-CREF Life prospectus S7 a 2008 SEC filing and a variable immediate annuity with a fixed-account option, not a pure fixed SPIA; the Mutual of Omaha overview S8 a 2017 producer document. None is a currently-sold product spec; they supply design vocabulary and contractual precision. Composite parameter levels follow the current-era anchors S1 S2 S3; only mechanics come from the older documents.

Regulatory context#

Standard Valuation Law (Model #820) and CARVM. Model #820 is the enabling statute for the Commissioners Annuity Reserve Valuation Method and makes the Valuation Manual operative for annuity contracts REG-R1 REG-R3. The codified text is AP&P Appendix A-820, read at first hand on 2026-08-06 REG-R153 — the manual turned out to be a free download, not the paid publication the library had recorded REG-R33, so the CARVM construction no longer rests on the Model #820 print alone. Three A-820 paragraphs bear directly on this product. ¶15 states CARVM as “the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits” at the end of each contract year, less the present value of future valuation considerations payable before that year end, with the guaranteed benefits projected on the contractual mortality (if any) and interest basis and the valuation basis entering through the discounting REG-R153 ¶15. ¶14 is the scope gate: ¶15 reaches all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under an employer or employee-organization retirement or deferred compensation plan (IRA/§408 plans excepted), which ¶13.b routes to a CRVM-consistent method instead — an individual retail SPIA is squarely inside ¶15 REG-R153 ¶¶13.b, 14. ¶6 fixes the triple: for individual annuity and pure endowment contracts the minimum standard is the method of ¶¶14–15, the valuation interest rates of ¶¶7–10, and the tables defined in Appendix A-821 REG-R153 ¶6. TIAA-CREF Life states the application to this product directly: “For deferred annuities in the pay out stage, Single Premium Immediate Annuities (‘SPIA’) and supplementary contracts, the path of future guaranteed benefits with the highest present value is used to set policy reserves” S7.

AG 33 does not reach a no-option SPIA. Actuarial Guideline XXXIII — printed title “Determining CARVM Reserves for Annuity Contracts With Elective Benefits” — has now been read in full REG-R151, and the finding for this product is a negative one. Its applicability sentence reads: “This Actuarial Guideline shall apply to all annuity contracts subject to CARVM, where any elective benefits (as defined below) are available to the contract owner under the terms of the contract”; and its Definitions block classes as non-elective “benefits payable under either a deferred or immediate annuity contract (with or without life contingencies), where no benefit options are available under the terms of the contract” REG-R151 Purpose, Definitions 1. A life_only, cash_refund or life_certain contract of the composite design with no commutation right — the base configuration here, commutation_enabled = false — is therefore inside CARVM and outside AG 33. Add the commutation of the certain portion that MassMutual and NYL offer S1 S5 and the contract is inside both, because commutation is a benefit option “freely elected under the terms of the contract”; the mechanics of that case are worked in technical-notes.md, “Reserve basis”. Two corrections to statements the library had carried second-hand, recorded here because both were repeated wherever AG 33 was cited by title only. One, the effective date. The guideline’s own printed Effective Date block reads “This guideline shall be effective on December 31, 1998, affecting all contracts issued on or after January 1, 1981”, against the December 31, 1995 date the library carries from the Revenue Ruling for a differently-titled instrument — the 1 January 1981 issue-date reach is common to both, the effective date is not, and the extracted pages carry no amendment history, so the natural reconciliation (a later revision) is an inference this library does not assert. Two, the elective/non-elective split. Nursing home benefits are non-elective, not elective — they are named in the Definitions non-elective list — so any earlier library note placing nursing-home waivers among the elective set is wrong REG-R151. AG 33’s grade-in ran to 100% by December 31, 2000 and has no live effect on any current valuation REG-R151 Effective Date.

VM-22 (PBR for non-variable annuities). Effective for valuation dates on or after January 1, 2026, VM-22 constitutes CARVM for non-variable annuities, with a three-year elective transition under VM-A/VM-C/VM-M/VM-V and a small-company Annuity PBR Exemption keyed to $1.0 billion of exemption reserves ($2 billion at group level) R2 REG-R36. SPIAs sit in the Payout Annuity Reserving Category with DIAs, structured settlements, annuitizations of host contracts, supplementary contracts and pension risk transfer annuities; the stochastic reserve is CTE70; the prescribed annuitization rate is 0%; and the prescribed lapse table “is not applicable” for contracts with no account value or surrender benefit — exactly this product R2 REG-R36. Correction to a common citation error: in the January 1, 2026 Valuation Manual, VM-22 is entirely the PBR framework; the maximum valuation interest rate machinery for income annuities that VM-22 historically carried now sits in VM-V Section 1 R1 R2 REG-R36 REG-R37. A model citing “VM-22 income annuity interest rates” against a current Valuation Manual is citing the wrong section.

VM-V Section 1 (maximum valuation interest rates for income annuities), and the AG IX family. For immediate annuities issued after December 31, 2017, VM-V §1 defines the statutory maximum valuation interest rate complying with Model #820, “to be used in the CARVM and for some contracts, CRVM” R1 REG-R37. The quarterly rate is Iq = R + S − D − E with spread deduction E = 0.25%, rounded to the nearest ¼% for non-jumbo contracts; jumbo contracts (initial consideration ≥ $250 million) use a daily Id = Iq + C(d−1) − Cq rounded to 1/100 of 1% R1. The bucket A–D follows from the reference period (premium determination date to the earlier of the last non-life-contingent payment and the first life-contingent payment, rounded to the nearest year) and the initial age (age last birthday at that date, the younger annuitant on a joint contract, the rated age if valued as impaired) R1. Of the annuity/CARVM guidelines indexed in VM-C, four touch this product — AG IX (form classification of individual SPIAs), AG IX-A and AG IX-C (substandard annuity mortality for impaired lives, structured settlements and SPIAs respectively) and AG IX-B (methods under the SVL for individual SPIAs) REG-R41 — and VM-V §1 expressly supersedes AG 9-B and the valuation-interest-rate references in AG 9-C R1 REG-R37 REG-R41.

The formulaic rate A-820 prints, for the issues VM-V §1 does not reach. For a single premium immediate annuity the A-820 dynamic formula is I = .03 + W(R − .03) with a flat weighting factor W = .80 — no Plan Type and no guarantee-duration lookup enters, those being reserved to “other annuities” — and R is the 12-month average of the Moody’s composite yield on seasoned corporate bonds ending June 30 of the calendar year of issue or purchase, the result “rounded to the nearer one-quarter of one percent (1/4 of 1%)” REG-R153 ¶¶7.a.i(b), 8.b, 9.b. Two limits are recorded rather than papered over: A-820 prints no tie-break for that rounding — the “ties down” convention belongs to VM-20 §3.C.2.a and must not be read off A-820 REG-R153 ¶7.a.i REG-R3 — and the whole ¶7 machinery is triggered “for policies issued on or after the effective date of the Codification”, a threshold date A-820 never prints REG-R153 ¶7. For immediate annuities issued after 12/31/2017 this formula is superseded for maximum-rate purposes by VM-V §1 above R1 REG-R37; it governs the older in-force layer.

Valuation mortality (Model #821 and VM-M). The 2012 Individual Annuity Reserving (2012 IAR) Mortality Table is the minimum valuation standard for individual annuity contracts R4, and it is generational: q_x^(2012+n) = q_x^2012 × (1 − G2_x)^n, with q_x^2012 from the 2012 IAM Period Table and G2_x from Projection Scale G2 R3 R4 REG-R59. The result “shall be rounded to three decimal places per 1,000… the rounding shall occur according to the formula above, starting at the 2012 period table rate” — chaining already-rounded rates is explicitly incorrect (male 30, q^2012 = 0.741; q^2014 = 0.741 × 0.99² = 0.7262541 → 0.726, not 0.734 × 0.99 = 0.727) R3 R4 REG-R59. Structured settlements funding tort, workers’-compensation or LTD claims instead use 1983 Table “a” without projection R4.

The effective dates, now read from the codified appendix rather than inferred. A-820 ¶6 makes Appendix A-821 the mortality leg by direct cross-reference, and A-821 prints the table-by-issue-date rules the library previously did not carry REG-R153 ¶6, A-821 ¶¶10–12, 15: the Annuity 2000 Mortality Table for any individual annuity or pure endowment contract issued 1 January 2001 through 31 December 2014; the 2012 IAR Mortality Table for issues on or after 1 January 2015; 1983 Table “a” without projection “solely when the contract is based on life contingencies and is issued to fund periodic benefits arising from” tort or out-of-court settlements, workers’-compensation-type claims, or long-term-disability claims where an annuity replaces continuing disability payments; and the 1994 GAR Table for annuities purchased under a group annuity or pure endowment contract, for which no effective date is printed. A-821 also prints the 2012 IAM Period Table and Projection Scale G2 in full, both sexes, age nearest birthday, at its Appendices I–IV; the male-30 anchor above (1000·q = 0.741, G2 = 0.010) is confirmed against the printed tables REG-R153. Two limits stay open. A-821 prints no standard for an individual annuity issued before 1 January 2001, so the valuation table for the oldest in-force layer is not sourced here; and the 1994 GAR, Annuity 2000 and 1983 Table “a” are named and not printed, so A-821’s 1994 GAR projection formula q_x^(1994+n) = q_x^1994 · (1 − AA_x)^n is not computable from library sources REG-R153.

Nonforfeiture — expressly inapplicable. Model #805 §2.A excludes immediate annuities (and deferred annuities after payments commence) from the Standard Nonforfeiture Law R5 REG-R42. Correction to a common misstatement: Model #805’s indexed nonforfeiture rate is the lesser of 3% and the five-year CMT (rounded to the nearest 1/20th of 1%) reduced by 125 basis points, subject to a floor of 15 basis points (0.15%) — not 1% REG-R42. That floor governs the deferred products in this library and is stated here only so it is not mis-applied to a SPIA, which has no nonforfeiture floor at all.

Disclosure and suitability. Correction to a common citation error: the Annuity Disclosure Model Regulation is Model #245, not #250 — #250 is the Variable Annuity Model Regulation REG-R45 REG-R43. Model #245 §3.A excludes “immediate and deferred annuities containing no non-guaranteed elements” from scope REG-R45, so a plain fixed SPIA of the composite design falls outside the annuity disclosure and illustration rules entirely; a participating SPIA paying dividends S11 would not. Model #275 (2020 best-interest revision) applies to the recommendation and bears on distribution cost and replacement behavior, not on contract cash flows REG-R46.

SEC registration. A fixed SPIA of this design is a state-regulated insurance contract and is not SEC-registered [unverified — no retrieved document states this as a legal conclusion]. The verified contrast: the single premium immediate variable annuity is registered and sold by prospectus, and the only SEC-filed document in this research is exactly that — TIAA-CREF Life’s Rule 497(c) prospectus, Registration No. 333-46414 S7 — carrying separate-account charges a fixed SPIA does not have (M&E maximum 1.00% / current 0.40%; administrative expense 0.20%; total separate account maximum 1.20% / current 0.60%; no annual contract fee) S7.

IRC §72 — exclusion ratio. For a nonqualified SPIA each payment splits into an excludable return of investment and a taxable interest element, at exclusion ratio = investment in the contract ÷ expected return R6 R7 REG-R55; the exclusion “shall not exceed the unrecovered investment in the contract immediately before the receipt of such amount” R6, and unrecovered investment remaining at death is deductible on the annuitant’s final return R6. Expected return uses the IRS actuarial tables by payout form, with a refund feature adjustment reducing the investment in the contract by the Table III/VII percentage × min(net cost, total guaranteed return) — the adjustment that must be applied to cash-refund and installment-refund SPIAs R7. The tax-free amount per payment is fixed in dollars at the first payment and does not increase with COLA increases R7, so a COLA SPIA’s taxable proportion rises over time. The §72(q) 10% penalty does not apply to distributions “under an immediate annuity contract” R6 S11, but NYL warns that adding a withdrawal feature can retroactively expose pre-59½ payments to the 10% tax plus interest S5, and a contract offering “an option to receive a lump sum in full discharge of the obligation” is a disqualifying form of payment or settlement under Regs. §1.72-6(d)(3) R7. Immediate annuities are also valid §1035 exchange destinations REG-R56. Taxation is a policyholder-side computation generating no insurer cash flow.

IRC §401(a)(9) — qualified contracts. Payments must be periodic, at intervals not exceeding one year, and nonincreasing except as permitted; a constant percentage increase applied at least annually at a rate less than 5% per year is permitted, as are increases tracking an eligible cost-of-living index R8 REG-R57. The period certain is capped by the uniform lifetime table denominator at the annuity starting date R8, operationalized by Pacific Life as ≤ 10 years (9 for an inherited IRA) S2. Non-spouse survivor percentages are capped by the MDIB table, 52% at a 40+ year age gap up to 100% at ≤ 10 years; a spouse may always take 100% R8. The 2024 RMD final regulations (T.D. 10001, applicable for calendar years beginning January 1, 2025) finalize this framework and add the QLAC and partial-annuitization rules that matter to the DIA chassis REG-R58.