“Performance Annuity”, the latest product launched by The Standard Life Assurance Company has launched “Performance Annuity”, a Variable Payout Annuity.

Long available in the UK and USA, VPAs are new in Canada. Like a conventional annuity, a VPA provides an income for life, but like a RRIF, it gives investors the opportunity to see their income grow in line with the investments they choose.

“This new solution, which is finally available in Canada, combines the risk management benefits of longevity insurance and the investment attributes of asset allocation,” said Dr. Moshe A. Milevsky, PhD, executive director of The IFID Centre and Finance Professor at the Schulich School, in a news release. “Variable payout annuities are certain to revolutionize retirement planning in Canada.”

Milevsky has completed timely research on the subject. His technical paper, “How to Completely Avoid Outliving Your Money,” outlines in detail the rationale for investing in VPAs. “Offering fixed payout annuities without variable payout annuities is like having bonds without stocks,” said Milevsky.

Standard Life’s “Performance Annuity” offers investors a choice of five index-linked investment funds. Investors also decide whether to advance future investment returns or not by selecting from four available rates of Anticipated Investment Return. “Performance Annuity” may be switched to a conventional annuity at any time or bundled with a conventional annuity to provide a guaranteed base income.