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How the MMBB Annuity Works

When you are preparing to retire, you will convert a portion of the funds in your MMBB investment accounts into an annuity.

You will “cash in” shares of the funds in which you are currently invested and use those funds to “purchase” shares in the Annuity Fund.

Assets which you do not convert remain invested in the MMBB investment funds that you designate. You can convert them into an additional annuity later, take a partial or full withdrawal or take a loan from those funds.

How your Annuity units are calculated

When you convert your account into an annuity, you are given a certain number of annuity units. The number of units assigned to you is determined by several factors:

  • The amount of money you convert to an annuity
  • The form of annuity payment you select
  • Your life expectancy and that of your joint annuitant (if any) at the time you retire

The number of annuity units remains unchanged during your lifetime unless you convert investments from another fund to create another annuity. They may also change in the case of a joint annuity. For example, if one party in a joint annuity dies, the number of units may decrease depending upon the form of annuity payment selected.

Types of annuity options available

When you are preparing to retire there are several options you can select regarding your retirement investment account. You can:

  • Convert the full value or part of the account to an annuity and receive monthly income throughout your lifetime
  • Leave your account at MMBB until you decide to use the funds
  • Decide not to convert your account to an annuity and, dependent upon your investment account, you may be eligible to take a complete or partial distribution from the account

Joint Annuity Options

  • The Single-Life Annuity
    This choice provides incomes based on 100% of annuity throughout the lifetime of the member only. When the members dies, annuity payment cease.

  • The Joint and Survivorship Annuity
This type of annuity provides income for two people, the member and the member’s spouse or joint annuitant. This annuity can be structured in three ways:
    • 100%/100% Joint and Survivor Annuity

      Monthly payments are based on 100% of the monthly annuity units. Regardless of whether the member or joint annuitant dies, the payments continue at 100% of the monthly annuity units for the rest of the survivor’s life.

  • 80%/80% Joint and Survivor Annuity
    This option provides the survivor with 80% of the monthly annuity units for life when either the member or the joint annuitant dies

  • 100%/60% Joint Annuitant and Survivor Annuity
    If the spouse is the first to die, the annuity units continue unchanged for the rest of the member’s life. If the member dies first the spouse will receive 60% of the monthly annuity units for their lifetime.

Additional Features

The Ten Year Guarantee

All MMBB annuities have a built-in guarantee of 120 monthly or ten years of payments. You can choose to waive this guarantee.

The guarantee ensures that you and your joint annuitant (if applicable) will receive a minimum of ten years of income from your annuity if you and your joint annuitant die during the first 10 years of your annuity. The value of the remaining payments in the 10-year period can be either distributed to your beneficiary as a complete settlement or paid out in the form of an annuity for the remaining # of months. If this option is chosen, the amount of these payments would be subject to change each January based on the annual payout value. The ten year period begins when you start receiving annuity income. If you or your spouse lives beyond the 120 month period, your annuity income will continue for as long as each of you lives.

This guarantee is not dependent upon the type of annuity you choose. It applies for both the single-life and joint/survivorship annuities. MMBB strongly urges members to keep the 10-year guarantee. In most cases the decision to waive this guarantee will add less than 1% additional income to a joint annuity and slightly more than 1% to a single-life annuity.

When you are preparing to retire, you will receive estimates of your monthly income with and without the guarantee so you can made a comparison.

You must convert at least 50% of funds contributed through your participation in the Comprehensive Plan.