Which factor is NOT used to determine annuity rates for DC pension fund members, according to the sources?

Which factor is NOT used to determine annuity rates for DC pension fund members, according to the sources?

• A. Gender
• B. Civil status
• C. Level of government bond yields
• D. Age

Answer: (D)

Annuity rates for converting a DC pension pot are driven by two main inputs: how long the payments are expected to last (mortality assumptions) and the cost of funding those payments today (discount rates from market yields). The sources specifically highlight gender as a factor that reflects different life expectancies and civil status as a factor that affects whether a survivor benefit is payable. They also point to the current level of government bond yields as the market input used to discount future payments. Age is not treated as a separate direct determinant in these sources, so it isn’t used to set the annuity rate in this context.

Annuity rates for converting a DC pension pot are driven by two main inputs: how long the payments are expected to last (mortality assumptions) and the cost of funding those payments today (discount rates from market yields). The sources specifically highlight gender as a factor that reflects different life expectancies and civil status as a factor that affects whether a survivor benefit is payable. They also point to the current level of government bond yields as the market input used to discount future payments. Age is not treated as a separate direct determinant in these sources, so it isn’t used to set the annuity rate in this context.