Security Benefit Enhances its Foundations Annuity With New Indices for Greater Diversification
April 25, 2023 by Security Benefit
TOPEKA, Kan.–(BUSINESS WIRE)–Security Benefit Life Insurance Company (Security Benefit) today announced the expansion of the index crediting strategies for its Foundations Annuity. Foundations now offers a total of 11 index crediting accounts across five unique indices designed to perform in a variety of market conditions.
Fixed index annuities (FIAs) offer the best features of a traditional fixed annuity — a guarantee of the purchase payment and tax deferral — combined with the opportunity to increase retirement savings through a diversified range of interest crediting options based on financial indexes.
“By employing an index as an interest crediting option, an FIA like Foundations has the potential to credit interest when the index goes up,” said Toby Leonard, AVP, Head of Product Development for Security Benefit. “But if the index goes down, the principal and previously credited interest are locked in and will not decline as contractowners don’t actually have any direct participation in the markets.”
The new indices are designed to help address challenges posed by changing economic conditions. “We were a pioneer in offering custom indexes within an FIA, and these additions to our index line-up continue that legacy,” noted Leonard. They include:
The S&P Multi-Asset Risk Control (MARC) 5% Index aims to perform during multiple market environments: Growth, rising rates, falling rates, high volatility, and high inflation and/or weak U.S. Dollar, with a goal of a 5% level of volatility. It is designed to track the performance of a risk-weighted portfolio consisting of: Equities – S&P 500® Excess Return Index; Commodities – S&P GSCI Gold Excess Return Index; and Fixed Income – S&P 10-Year U.S. Treasury Note Futures Excess Return Index. The index is dynamically rebalanced daily to provide multi-asset diversification within a simple risk weighting framework. Should one or more of the markets experience a downturn which impacts the performance of a specific asset class, the multi-asset construction of the index allows for a systematic re-balancing to less volatile asset classes. If all asset classes are volatile the risk control also allows for reducing market exposure and increasing the allocation to interest free cash. In order to take advantage of potential market growth, the Index may allocate more than 100% to the component indices. Should the component indices experience market declines, the Index can move a greater portion to interest free cash while still targeting 5% volatility.
The Morningstar Wide Moat Barclays VC Index aims to provide stable returns based on the long-term strength of its selected stocks across multiple sectors. The Index creates a diversified portfolio by combining the U.S. stocks selected based on the Economic Moat investment philosophy with a portfolio of four Barclays US Treasury futures indices. The equity component is the Morningstar® Wide Moat Focus IndexSM, which aims to select companies with long term competitive advantages and the most compelling values, based on research conducted by Morningstar’s Equity Research Team. The treasury component consists of an equally weighted portfolio of 2-year, 5-year, 10-year and 30-year Barclays US Treasury Futures indices. The Index seeks to enhance return and manage risk exposure by adjusting the portfolio’s asset allocation on a monthly basis using techniques from the Modern Portfolio Theory, the theory of optimizing expected returns based on a given level of market risk. The multi-asset class index aims to provide stable returns across different market environments, and to further control risk, the Index adds a volatility control overlay which aims to maintain its annual volatility level at or below 7%.
Foundations is a flexible vehicle that financial professionals can offer their clients to help meet their retirement goals with: tax-deferred accumulation potential, flexible withdrawal options, and that can even play a part in legacy planning. Foundations is also an appealing fixed income alternative as it guarantees principal and is free from bond market risk, interest rate risk, and sequence of returns risk. For more details, visit (link to approved landing page).
About Security Benefit
Security Benefit Corporation (“Security Benefit”), through its subsidiary Security Benefit Life Insurance Company (SBL), a Kansas-based insurance company that has been in business for more than 131 years, is a leader in the U.S. retirement market. Security Benefit together with its affiliates offers products in a full range of retirement markets and wealth segments for employers and individuals and held $47.8 billion in assets under management as of December 31, 2022. Security Benefit, an Eldridge business, continues its mission of helping Americans To and Through Retirement®. Learn more at www.securitybenefit.com and follow us on LinkedIn, Facebook or Twitter.
Security Benefit Life Insurance Company is not a fiduciary and the information provided is not intended to be investment advice. This information is general in nature and intended for use with the general public. For additional information, including any specific advice or recommendations, please visit with your financial professional.
The Security Benefit Foundations Annuity, form 5800 (11-10) and ICC10 5800 (11-10), a flexible purchase payment deferred fixed index annuity, is issued by Security Benefit Life Insurance Company (Security Benefit). Product features, limitations, and availability may vary by state. In Idaho, Foundations is issued on form ICC10 5800 (11-10).
Guarantees provided by annuities are subject to the financial strength of the issuing insurance company. Annuities are not FDIC or NCUA/NCUSIF insured; are not obligations or deposits of and are not guaranteed or underwritten by any bank, savings and loan, or credit union or its affiliates; and are unrelated to and not a condition of the provision or term of any banking service or activity.
Fixed index annuities are not stock market investments and do not directly participate in any equity, bond, other security, or commodities investments. Neither an index nor any fixed index annuity is comparable to a direct investment in the equity, bond, other security, or commodities markets.
Neither Barclays Bank PLC (BB PLC) nor any of its affiliates (collectively Barclays) is the issuer or producer of the Foundations Annuity (the Product) and Barclays has no responsibilities, obligations, or duties to purchasers in the Product. The Morningstar Wide Moat Focus Barclays VC 7% Index ER (the Index), together with any Barclays indices that are components of the Index, is a trademark owned by Barclays and, together with any component indices and index data, is licensed for use by Security Benefit Life Insurance Company (Security Benefit) as the issuer or producer of the Product (the Issuer).
Barclays’ only relationship with the Issuer in respect of the Index is the licensing of the Index, which is administered, compiled, and published by BB PLC in its role as the index sponsor (the Index Sponsor) without regard to the Issuer or the Product or purchasers in the Product. Additionally, Security Benefit as issuer or producer of the Product may for itself execute transaction(s) with Barclays in or relating to the Index in connection with the Product. Purchasers acquire the Product from Security Benefit and purchasers neither acquire any interest in the Index nor enter into any relationship of any kind whatsoever with Barclays upon making an investment in the Product. The Product is not sponsored, endorsed, sold, or promoted by Barclays and Barclays makes no representation regarding the advisability of the Product or use of the Index or any data included therein. Barclays shall not be liable in any way to the Issuer, purchasers or to other third parties in respect of the use or accuracy of the Index or any data included therein.
The Index is created and maintained solely by Barclays using a combination of U.S. Treasury Futures holdings selected by Barclays and the Morningstar Wide Moat Focus IndexSM (Wide Moat Focus Index) in its entirety. Morningstar, Inc. (Morningstar) has no relationship to Barclays, other than to license Barclays the right to use the Wide Moat Focus Index in the Index. Under this licensing arrangement, Barclays must include the Wide Moat Focus Index in its entirety in the Index. Morningstar has no responsibility for the compilation or maintenance of the Index or its performance, and no liability to anyone for its use. The Morningstar name and logo are registered marks of Morningstar. Morningstar does not guarantee the accuracy, completeness or timeliness of the Wide Moat Focus Index or any data included in it and expressly disclaims any warranties associated with it.
The Product is a fixed index annuity created and maintained by Security Benefit. The Product is not sponsored, endorsed, sold, or promoted by Morningstar or any of its affiliates (collectively, the Morningstar Entities). The Morningstar Entities make no representation or warranty, express or implied, to the owners of the Product or any member of the public regarding the advisability of acquiring any financial product, including, without limitation, the Product. The Morningstar Entities are not responsible for and have not participated in: (i) the determination of the participation of the crediting strategy of the Product; (ii) the timing of the issuance or sale of the Product; or (iii) the determination or calculation of the equation by which the Product is converted into cash; and the Morningstar Entities have no obligation or liability in connection with the purchase, administration, marketing, or crediting of interest for the Product. Bloomberg Index Services Limited is the official index calculation and maintenance agent of the Index, an index owned and administered by Barclays. Bloomberg Index Services Limited does not guarantee the timeliness, accurateness, or completeness of the Index calculations or any data or information relating to the Index.
Bloomberg Index Services Limited makes no warranty, express or implied, as to the Index or any data or values relating thereto or results to be obtained therefrom, and expressly disclaims all warranties of merchantability and fitness for a particular purpose with respect thereto. To the maximum extent allowed by law, Bloomberg Index Services Limited, its affiliates, and all of their respective partners, employees, subcontractors, agents, suppliers and vendors (collectively, the protected parties) shall have no liability or responsibility, contingent or otherwise, for any injury or damages, whether caused by the negligence of a protected party or otherwise, arising in connection with the calculation of the Index or any data or values included therein or in connection therewith and shall not be liable for any lost profits, losses, punitive, incidental or consequential damages.
The “S&P 500 Index,” “S&P 500 Low Volatility Daily Risk Control 5% Index,” “S&P Multi-Asset Risk Control (MARC) 5% Index,” and “S&P 500 Factor Rotator Daily RC2 7% Index” are products of S&P Dow Jones Indices LLC or its affiliates (“SPDJI”) and have been licensed for use by Security Benefit Life Insurance Company (SBL). S&P®, S&P 500®, US 500, The 500, iBoxx®, iTraxx® and CDX® are trademarks of S&P Global, Inc. or its affiliates (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”), and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by SBL. The Foundations Annuity is not sponsored, endorsed, sold, or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, and none of such parties make any representation regarding the advisability of purchasing the Foundations Annuity nor do they have any liability for any errors, omissions, or interruptions of the above-named indices.
S&P DOW JONES INDICES DOES NOT GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS AND/OR THE COMPLETENESS OF THE S&P MARC 5 INDEX OR ANY DATA RELATED THERETO OR ANY COMMUNICATION, INCLUDING BUT NOT LIMITED TO, ORAL OR WRITTEN COMMUNICATION (INCLUDING ELECTRONIC COMMUNICATIONS) WITH RESPECT THERETO. S&P DOW JONES INDICES SHALL NOT BE SUBJECT TO ANY DAMAGES OR LIABILITY FOR ANY ERRORS, OMISSIONS, OR DELAYS THEREIN. S&P DOW JONES INDICES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR AS TO RESULTS TO BE OBTAINED BY SBL, OWNERS OF THE SBL ANNUITY PRODUCT OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P MARC 5 INDEX OR WITH RESPECT TO ANY DATA RELATED THERETO. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT WHATSOEVER SHALL S&P DOW JONES INDICES BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO, LOSS OF PROFITS, TRADING LOSSES, LOST TIME OR GOODWILL, EVEN IF THEY HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE. THERE ARE NO THIRD-PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN S&P DOW JONES INDICES AND SBL, OTHER THAN THE LICENSORS OF S&P DOW JONES INDICES.
Michael Castino, Director of Public Relations, Security Benefit
Jake Daubenspeck, Senior Vice President, Prosek Partners