ACGA:
The American Council on Gift Annuities (ACGA) board of directors held its semi-annual meeting on November 7, 2011. As part of a continual monitoring process, the board reviewed the current assumptions that underlie the rates schedules. Given the significant changes in the economic environment, the board approved a new schedule of suggested maximum gift annuity rates which will become effective January 1, 2012. At ages older than 60, when the majority of gift annuities are issued, one-life rates will decline by 0.5% to 0.8%.
You have probably heard from ACU or others about the benefits charitable gift annuities can offer. (See here for a concise explanation.)
- Backed by the full assets of Abilene Christian University
- Increases income, sometimes significantly, over a maturing CD or a savings account
- Provides a current charitable income tax deduction to you
- Can help you avoid capital gains taxes
- A significant portion of your annuity payment may be income tax-free
- Provides you with fixed income for your life, or jointly for your and your spouse’s lives
- Upon your passing any remainder will go towards funding life-changing opportunities for future students at Abilene Christian
But as the announcement from the ACGA (the group that sets recommended gift annuity rates, to which ACU adheres) makes clear, those rates are being lowered effective January 1, 2012. Depending on your age and whether you create a single-life or joint-life annuity, your rate will drop between 0.4-0.8%.
As an example, for a husband and wife both aged 70, the gift annuity rate until December 31 is 5.2%. Beginning January 1, 2012, that rate will be 4.6%.
For a single individual aged 75, the current gift annuity rate is 6.5%. Beginning January 1, that rate will be 5.8%.
For a husband and wife both aged 80, the current gift annuity rate is 6.3%. Beginning January 1, that rate will be 5.7%.
It is important to note that if you have already created a gift annuity with ACU or any other non-profit, the contractual rate and payment you currently receive will not be changed. This rate change is effective only for new gift annuities created after December 31, 2011.
If you have ever considered a charitable gift annuity and you have a low-yielding savings account, a recently-matured CD, or a CD that will mature prior to December 31, we encourage you to call The ACU Foundation (800-979-1906) and we will be happy to provide specific information for your situation with no obligation.
Our offices will be closing at 5pm on December 23 and remain closed through January 2 for the Christmas holiday, but we can complete transactions postmarked and funded by December 31.