Annuity


What is an annuity?

An annuity is a series of guaranteed payments (income) made to you throughout your retirement. You can choose to have the income continue after your death, for example to your spouse.

Your annuity is purchased from the proceeds of:

  • your personal pension plan;
  • your company or executive pension plan;
  • your Additional Voluntary Contribution (AVC) scheme;
  • death benefit paid through an occupational pension scheme (group pension scheme). In this case the annuity will be paid to your dependants or beneficiaries; or
  • your PRSA.

Note: Purchased Life Annuities (annuities purchased through your own savings rather than through a retirement fund) are not available through Canada Life.

Do I have to purchase an annuity?

If you are a member of a defined contribution scheme (group pension scheme), an annuity will most likely be purchased, referred to as a “Compulsory Purchase Annuity”. This is to ensure you have a guaranteed income for life.

If you have a personal pension plan or a PRSA, you are a 5% proprietary director or you have made Additional Voluntary Contributions, you will have additional retirement options and you may use your retirement funds to purchase an ARF or AMRF on their own or alongside an annuity.

Note: This section does not deal with the retirement options of defined benefit schemes, which are available from the trustees of the scheme.

For more information please see the Annuity Factsheet
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