RALEIGH, N.C. – Members of State Employees Credit Union (SECU) wanting to round out long-term investment offerings now have access to a fixed annuity product. SECU recently partnered with Jackson National Life (JNL) to offer a “much anticipated, member requested” product – the NCSECU Fixed Annuity. The product is a flexible premium deferred fixed annuity that offers guarantee of principal (less prior withdrawals), a one-year interest rate guaranteed period and a first-year interest rate bonus. “The accumulation of sufficient retirement savings is a major concern to us all as is the possibility of outliving your money,” said Harry Dixon, SECU’s senior vice president of insurance services. “A fixed annuity can help in responding to these concerns.” The owner of the annuity makes a premium contribution(s) and earns interest on a tax-deferred basis. No income taxes are due on earnings until they are taken out of the annuity. The current interest rate (as of 1/2/03) is 5.45%, which includes a first year interest rate bonus of 1.00% with the minimum interest rate set at 3 percent. The product, issued by JNL and offered exclusively through SECU, became available on Dec. 2, 2002. With one million members and more than $9.8 billion in assets, SECU is the second largest credit union in the nation and the largest in the state. Part of the marketing process begins with educating members on how an annuity is established, Dixon said. Fixed annuities are generally intended as a long-term savings vehicle, and each premium payment can be most effective when left in place for at least seven years or until retirement, some financial experts advise. Amounts withdrawn may be subject to withdrawal charges, which may further reduce the annuity’s accumulated value. An annuity’s earnings are taxable as ordinary income when withdrawn and, if taken before age 59 1/2, may be subject to a 10% federal tax penalty. Tax deferral may not be available if the annuity is owned by a “non-natural” person such as a corporation or certain types of trusts. A number of SECU’s 400 licensed agents will undergo training over the next few months to offer the product at the credit union’s 154 branches. While the product has only been on the market for nearly two months, Dixon said “numerous sales” have begun to lay the foundation. “As with all our products, we aren’t trying to target a certain member but some (products) are going to be appealing to more than others,” he explained. The draw thus far may be the annuity’s “attractive rate” which includes a bonus rate and its potential contribution to a mix of investments such as money market account, Dixon said. As one of America’s largest life insurance companies, with more than $51 billion in assets and a AAA rating (“extremely strong”), the highest possible rating of 21 insurer financial strength ratings by Standard and Poor’s, SECU chose to partner with JNL for its reputation and the firm’s receptiveness to allowing a private label product. -

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