Ministerial Pension Plan (MPP) Annuity Payout Rates

The Ministerial Pension Plan (MPP) requires you to convert 65% of your account balance to an annuity. The annuity “payout rate” is the portion of the amount being annuitized that is paid out each year.

For example, if you are annuitizing $100,000 and the payout rate is 5.0%, the amount you receive in a year would be $100,000 times 5.0% or $5,000. Use the Retirement Benefits Projection in Benefit Access or contact Wespath Benefits and Investments (Wespath) to determine your estimated payment based on the projected payout rate and other information specific to you.

  • Wespath may reset the payout rate monthly if conditions (such as a material increase or decrease in market interest rates) warrant.
  • Wespath continually monitors annuity conversion issues and evaluates alternatives to current Wespath products.
  • Mortality assumptions are based on standardized mortality tables, which may change from time to time.
  • Higher interest rates generally result in higher payout rates.

Current Sample Payout Rates

Annuity Type Single Life / 2% COLA Joint & 70% Survivor* / 2% COLA
Issue Age 62 65 70 72 62 65 70 72
October 2016 4.68% 5.14% 6.15% 6.67% 4.02% 4.35% 5.08% 5.46%

* Assumes spouse is two years younger.

Calculating Annuity Payments

Examples of How the Payout Rate is Converted to Annuity Payments

In the following examples, assume that you want to begin receiving your benefit at age 65, your spouse will be 63 and 65% of your account balance (the amount that must be annuitized) is $100,000.

Example 1
If you elected a Joint Life and 70% Survivor benefit with a 2% COLA for benefits beginning September 1, 2016 or later but before a new rate is effective, then your starting annual benefit would be $4,410 ($100,000 x 0.0441 = $4,410). Since this assumes a 2% annual increase, your benefit will increase to $4,498.20 the following year ($4,410 x 1.02 = $4,498.20).

If you died in the first year, your spouse would receive 70% of your benefit, or $3,087 ($4,410 x 0.7 = $3,087). This amount would also increase 2% a year for your spouse’s lifetime.

Example 2
If you elected a Single Life benefit with a 2% COLA for benefits beginning on September 1, 2016, then your starting annual benefit would be $5,200 ($100,000 x 0.052 = $5,200). Since this assumes a 2% annual increase, your benefit will increase to $5,304 the following year ($5,200 x 1.02 = $5,304). When you die, your benefits stop.

When you purchase an annuity, insurance companies invest the money you use to purchase the annuity and forecast what they expect to earn on their investment. They reduce their expected earnings to account for profit, sales and administrative costs, and the risk that you (and your spouse, if applicable) will live longer than the average life expectancy, since healthier people may be inclined to purchase annuities. These considerations determine the amount of your annuity payment.

Wespath uses a similar approach, but does not charge sales costs, build in profit or adjust for the risk that you and your spouse might live longer than expected.

Once your annuity has been set up, the monthly payment amount will not change (except for annual increases, if applicable).

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Comparing Insurance Products with Wespath-Administered Annuities

The best way to compare insurance products with Wespath-issued annuities is to request a quote from an insurance company under the same terms used by Wespath (i.e., identical annuity type, contingent annuitant and cost of living adjustment [COLA]). When Wespath calculates annuities, retired married participants typically are provided estimates for a Joint Life and 70% Survivor annuity with a 2% annual COLA.

Comparing the payout rate that you receive from Wespath with the insurance company payout rate is not always an apples-to-apples comparison, however, since many insurance companies do not offer a COLA for annuities. Without a COLA, inflation will erode the purchasing power of your annuity payments over time. Also, the insurance company quote should reflect the payment of all applicable fees and sales charges. There are no fees or sales charges for Wespath-issued annuities.

EY Financial Planning Services, available at no cost to eligible participants in Wespath-administered retirement plans, can help you determine when to retire and how to plan your distributions.** Financial planners are available business days from 8:00 a.m. to 7:00 p.m., Central time at 1-800-360-2539.

** Costs are included in Wespath's operating expenses that are paid for by the funds.

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Historical Annuity Payout Rates

Wespath historically published the annuity conversion interest factor instead of the payout rate, since the payout rate is different based on individual details. In order to facilitate comparisons with insurance products, the annuity payout rate is now available. The annuity payout rates have also been calculated for historical comparison purposes.

Historical Sample Payout Rates

Annuity Type

Single Life / 2% COLA

Joint & 70% Survivor***/ 2% COLA

Issue Age Age 62 Age 65 Age 70 Age 72 Age 62 Age 65 Age 70 Age 72
October 2016 4.68% 5.14% 6.15% 6.67% 4.02% 4.35% 5.08% 5.46%
September 2016 4.75% 5.20% 6.21% 6.74% 4.08% 4.41% 5.14% 5.52%
July 2016 4.91% 5.36% 6.37% 6.90% 4.23% 4.57% 5.30% 5.67%
February 2016 5.07% 5.52% 6.54% 7.06% 4.39% 4.72% 5.45% 5.82%
July 2015 5.26% 5.82% 7.09% 7.74% 4.39% 4.78% 5.62% 6.05%
February 2015 5.11% 5.67% 6.93% 7.58% 4.24% 4.63% 5.48% 5.91%
October 2014 5.19% 5.77% 7.04% 7.70% 4.32% 4.71% 5.57% 6.00%

*** Assumes spouse is two years younger beginning February 2016. Rates published prior to February 2016 assumed spouse is three years younger.

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