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Article: Let's banish black holes with a few real figures.(Column)
- Article from:
- The Evening Standard (London, England)
- Article date:
- February 9, 2006
CopyrightCOPYRIGHT 2006 Solo Syndication Limited. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: NEIL COLLINS
TONTINE, as I'm sure you know, is an extreme form of annuity, where everyone in a group chips in, and the last survivors clean up at the expense of those who die earlier. Since the dead members are past caring, it used to be a popular, simple way for a group to avoid poverty in their old age. A modern annuity, by contrast, looks more like a way of giving away your capital for an income that will make sure you're poor when you retire.
Today's miserable annuity rates are the main reason why so many companies, whose final salary schemes are in effect the promise of an annuity to retired employees, have such vast deficits in their ...