PRESS RELEASE |
Media Contacts:
Jo Ann Tizzano
(212) 314-2979
joann.m.tizzano@axa-equitable
Michael Arcaro
(212) 314-2030
michael.arcaro@axa-equitable.com
AXA Equitable Introduces a Structured Investment Option for Its EQUI-VEST Tax-Sheltered Variable Annuity Series
Option Offers Growth Potential Linked to S&P 500 Price Return Index
With a Level of Downside Protection
AXA Equitable Life Insurance Company today introduced the Structured Investment Option (SIO) for its EQUI-VEST® series of variable deferred annuities available to employer-sponsored retirement savings plans.
The SIO offers plan participants the growth potential of the equity markets tied to the S&P 500 Price Return Index up to a cap, with some downside protection against market losses. AXA Equitable is the first company in the industry to offer this type of investment option in a variable annuity product used to fund 403(b) and 457(b) retirement savings plans.
“The greatest source of individual retirement income for many Americans will likely come from their employers’ retirement benefit plans,” said Mark Scalercio, senior vice president and head of AXA Equitable’s Employer Sponsored division. “We’re very pleased to be the first company to offer plan participants equity growth potential and a certain amount of protection in a variable annuity investment option.”
Plan participants can invest in one or more investment segments with the SIO. Each segment provides a rate of return tied to the performance of the S&P 500 Price Return Index (Index). If the Index goes up over the course of a segment’s investment period, a participant’s value in that segment will earn the same rate of return as the Index, up to a specified maximum rate of return called the Performance Cap Rate. The Performance Cap Rate is the maximum rate of return for the segment once it is established. AXA Equitable sets the Performance Cap Rate on the segment start date. If the Index goes down during a segment’s investment period, a segment buffer absorbs the first 10 percent of participant losses for a segment held till maturity. The buffer eliminates for the participant the negative impact of market volatility up to the first 10 percent of loss in Index value.
One key benefit of the SIO is flexibility. Participants can invest in segments through payroll contributions; transfers of amounts they have in other EQUI-VEST investment options; and rollovers and direct transfer contributions to their EQUI-VEST accounts. Participants can also choose to allocate 100 percent of their account value to the SIO.
“Our research last year found that six in 10 consumers polled believe equities were necessary to achieve retirement goals, but fewer than two in 10 felt confident in their ability to successfully invest in equities,” Scalercio said. “The SIO’s segment buffer and cap help plan participants mitigate this concern by safeguarding a portion of their investments in their EQUI-VEST account in down markets.”
How the SIO Works
Using the SIO, participants decide how much to allocate to an investment segment. Each segment has a $1,000 minimum investment requirement. Amounts designated for a segment are initially placed in a Segment Holding Account until a segment is established. Each segment has a specific start date and maturity date.
Amounts in a Segment Holding Account are transferred into a segment on the segment start date. AXA Equitable establishes a new segment each month. The Performance Cap Rates change from segment to segment, but are set on the segment start date and stay the same until the segment maturity date. Participants can choose a Performance Cap Threshold that a segment must meet or exceed before their funds are transferred into that segment. AXA Equitable provides online tools so participants can monitor the Performance Cap Rates.
Generally, a segment matures at the end of a one-year period. A segment’s rate of return is applied on its segment maturity date. Once a segment matures, participants have the flexibility to re-allocate the maturity value of the segment to a new segment or transfer their gains to other investment options available within EQUI-VEST, depending on their needs and objectives.
Additional Information
EQUI-VEST is issued by AXA Equitable Life Insurance Company and distributed by AXA Advisors, LLC. New York, NY 10104.
The Performance Cap Rate may limit an investor’s potential in up markets. While an investor is protected from some down side risk, if the negative return is in excess of the segment buffer there is a risk of a substantial loss.
The segment’s rate of return is subject to a cap and a buffer and is measured from the segment’s start date to the segment’s maturity date. Also, the Performance Cap Threshold is not an annual rate, as it is based on the segment duration. An investor cannot transfer out of a segment prior to its maturity to another investment option. An investor can only make withdrawals out of a segment or surrender the contract. If an investor takes a withdrawal from a segment on any date prior to maturity, the calculation of interim value of the segment may be less than the amount invested and may be less than the amount an investor would receive had the investment been held to maturity.
A variable annuity such as EQUI-VEST is a long-term financial product designed for retirement purposes. Simply stated, a variable annuity is a contract between an individual and an insurance company that lets individuals pursue the accumulation of assets through equities and other investment options. Individuals may then take payments or a lump sum amount at a later date. In EQUI-VEST, individuals invest to accumulate value on a tax-deferred basis in one or more of our variable investment options and/or in one of the segments comprising the SIO. There are contract limitations, fees and charges associated with variable annuities, which include, but are not limited to, mortality and expense risk charges, withdrawal charges and administrative fees. For costs and complete details, contact your financial professional.
In addition, annuity contracts have exclusions and limitations. Early withdrawals may be subject to withdrawal charges, and, if taken prior to age 59 1/2, a 10 percent federal income tax penalty may apply. Variable annuities are subject to investment risks, including the possible loss of principal invested. Variable annuities, when redeemed, may be worth more than or less than the total amount invested.
You should carefully consider your investment objectives and the charges, risks, and expenses of EQUI-VEST and the Structured Investment Option, as stipulated in the prospectus, before investing. For a prospectus containing this and other information, please contact your Financial Professional. Please read it carefully before investing or sending money.
The S&P 500 Price Return Index comprises 500 of the largest companies in leading industries of the U.S. economy. Larger, more established companies may not be able to attain potentially higher growth rates of smaller companies, especially during extended periods of economic expansion.
S&P®, Standard & Poor’s®, S&P 500® and Standard & Poor’s 500® are trademarks of Standard & Poor’s Financial Services LLC (“Standard & Poor’s”) and have been licensed for use by AXA Equitable. The SIO is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s does not make any representation regarding the advisability of investing in the SIO.
The SIO provides a rate of return tied to the performance of the S&P 500 Price Return Index (Index). The SIO does not involve an investment in an underlying portfolio. Instead, it is an obligation of and subject to the claims-paying ability of AXA Equitable Life Insurance Company. The return of the SIO may not be identical to the Index return. Individuals’ participation in any appreciation of the Index will not exceed the applicable Performance Cap Rate, which will be determined at the segment start date. Individuals cannot invest directly in an index. There is a risk of substantial loss of principal because investors agree to absorb all losses to the extent they exceed the protection provided by the SIO at maturity.
AXA Equitable may discontinue contributions to, and transfers among, investment options or make other changes in contribution and transfer requirements and limitations. Transfers are not allowed into and out of segments. AXA Equitable may suspend or discontinue a new segment at any time.
Contract form #s: 2004TSAGAC, 2004TSACERT-A/B, 2004EDCGAC, 2004EDCCERT-A/B, 2006BASE-I-A/B, 2006BASE-A/B, 2008EQVTSA201, 2008EQV201, 2008EQVEDC201, 2008EQVBASE201-A, 2008TSAGAC901, 2008TSA901-A/B. 2009EDCGAC901, 2009EDC901-A/B, 2009401aGAC901, 2009401a901-A/B and any state variations.
Contract endorsement form #s: 2010SIO201-I/G, 2011SIO901-ENGAC, 2011SIO900-ENGAC and any state variations.
Certificate endorsement form #s: 2011SIO901A/B, 2011SIO900-A/B and any state variations.
This is not a complete description of the EQUI-VEST product or the SIO. The SIO is not available in all states and EQUI-VEST contracts.
About AXA Equitable
In business since 1859, AXA Equitable Life Insurance Company (NY, NY) is a leading financial protection company and one of the nation’s premier providers of life insurance, annuity, and financial products and services. The company’s products and services are distributed to individuals and business owners through its retail distribution channel, AXA Advisors, LLC (member FINRA, SIPC) and to the financial services market through its wholesale distribution channel, AXA Distributors, LLC.
AXA Equitable’s Employer Sponsored division is dedicated to providing the retirement savings products and personalized financial education to meet the retirement needs of plan sponsors and participants in small- to mid-size businesses, as well as those who build and serve our communities – educators and staff in public schools, colleges, and universities; hospital and municipal workers; and non-profit employees.
Find AXA Equitable on Facebook and Twitter or visit the company’s multi-media newsroom The Source @ AXA Equitable.
AXA Equitable, a subsidiary of AXA Financial Inc., is part of the global AXA Group, a worldwide leader in financial protection strategies and wealth management. “AXA Group” refers to AXA, a French holding company for an international group of insurance and financial services companies together with its direct and indirect consolidated subsidiaries. For more information, visit www.axa-equitable.com.
###
