Milliman's pricing assumptions are likely to be different from those of the company in Clements' example, and Milliman is using a joint-and-survivor income benefit that is more costly than a
single life annuity.
You have the option to elect for a widow's pension not to be paid which will increase your
single life annuity. If you choose this option, your pension benefits will cease on death.
Thus, the joint and survivor benefit is a reduced
single life annuity that provides a benefit over two lifetimes instead of one.
However, now is not necessarily a good time for annuity rates, as a male aged 65 purchasing with pounds 10,000 a
single life annuity guaranteed for five years, would receive around pounds 893 per year income, as opposed to pounds 916 p.a.
The tax was paid by the estate on excess retirement accumulations, which were defined as the excess of the present value of the decedent's interest in all qualified retirement plans over the present value of a
single life annuity with annual payments equal to the annual excess retirement distribution limit.
The excess accumulation tax is paid by beneficiaries on inherited pension assets that exceed the value of a
single life annuity paying out $155,000 a year for someone with the life expectancy of the deceased.
The survivor joint annuity works in a slightly different manner than a
single life annuity. A retiring employee is promised a monthly retirement benefit lower than the single-life payment, This "premium" is usually about 10 percent of the higher payment.