Fee-Friendly Retirement Protection
Portfolio Income Benefit is designed to grow future income in all market conditions and, when they're ready, it can provide your clients with a steady amount of income for life.
Portfolio Income Benefit
Client Profiles
Consider Portfolio Income Benefit for retirees and pre-retirees who:
- Want to create a steady flow of income they can count on.
- Believe Social Security retirement benefits or pension income won’t be enough to cover their expenses.
- May be fearful that inflation could reduce the buying power of their dollars in retirement.
Highlights
If you determine that your client will have an income gap in retirement, Portfolio Income Benefit is an optional living benefit available with Pacific Odyssey® Advantage variable annuity that’s designed to help clients increase future income in the years leading up to retirement, in all market conditions, followed by a lifetime of protected income when they're ready.
Income Growth
On each contract anniversary, the protected payment base, which is the value from which income is calculated, can grow by the greater of the following:
- If markets perform well, automatic resets lock in gains for income purposes. Resets continue throughout the life of the contract.
- If markets are underperforming and no withdrawals are taken, a 5% simple-interest credit is added to the protected payment base for up to 10 years.
- After a reset occurs, any future annual credits are calculated on the higher protected payment base.
- As your client defers income, the guaranteed withdrawal percentage increases at each attained age.
Income Certainty and Flexibility
Clients can count on a steady amount of protected liftime income, beginning as early as age 59½. They also have the flexiblity to change their choice of Single Life or Joint Life after age 59½ and before withdrawals begin.
Fee-Friendly Structure
You have the ability to manage and bill on your clients' annuities without impacting the features and benefits of Portfolio Income Benefit.
The annual charge for Portfolio Income Benefit is a percentage of the protected payment base (deducted quarterly).
Single Life Option and Joint Life Option: 1.30%
Charges are set at contract issue and will not change while the optional benefit is in effect.
Lifetime withdrawal percentages are based on the age clients elect to begin withdrawals1 or the first withdrawal after a reset. Withdrawals for advisory fees do not affect lifetime withdrawal percentages.
The below lifetime withdrawal percentages are applicable for all states except New York. For New York lifetime withdrawal percentages, please reach out to your Pacific Life managing director or review the Pacific Odyssey® Advantage prospectus.
| Age at First Withdrawal | Single Life | Joint Life |
|---|---|---|
| 59.5 | 4.00% | 3.50% |
| 60 | 4.00% | 3.50% |
| 61 | 4.25% | 3.75% |
| 62 | 4.50% | 4.00% |
| 63 | 4.75% | 4.25% |
| 64 | 5.00% | 4.50% |
| 65 | 5.25% | 4.75% |
| 66 | 5.30% | 4.80% |
| 67 | 5.35% | 4.85% |
| 68 | 5.40% | 4.90% |
| 69 | 5.45% | 4.95% |
| 70 | 5.50% | 5.00% |
| 71 | 5.55% | 5.05% |
| 72 | 5.60% | 5.10% |
| 73 | 5.65% | 5.15% |
| 74 | 5.70% | 5.20% |
| 75 | 5.75% | 5.25% |
| 76 | 5.80% | 5.30% |
| 77 | 5.85% | 5.35% |
| 78 | 5.90% | 5.40% |
| 79 | 5.95% | 5.45% |
| 80 | 6.00% | 5.50% |
| 81 | 6.05% | 5.55% |
| 82 | 6.10% | 5.60% |
| 83 | 6.15% | 5.65% |
| 84 | 6.20% | 5.70% |
| 85 | 6.25% | 5.75% |
| 86 | 6.30% | 5.80% |
| 87 | 6.35% | 5.85% |
| 88 | 6.40% | 5.90% |
| 89 | 6.45% | 5.95% |
| 90 | 6.50% | 6.00% |
| 91 | 6.55% | 6..05% |
| 92 | 6.60% | 6.10% |
| 93 | 6.65% | 6.15% |
| 94 | 6.70% | 6.20% |
| 95+ | 6.75% | 6.25% |
The Joint Life lifetime withdrawal percentages are based on the younger spouse’s age. If early or excess withdrawals reduce the contract value to zero, Portfolio Income Benefit will terminate, and you will not receive withdrawals for life.
Withdrawals for Advisory Fees
Withdrawals for advisory fees do not stop the annual credit and will not affect the protected payment base for income purposes. Advisory fee withdrawals are limited to 1.50% of the annuity contract's cash value for the calendar year. Advisory fee withdrawals greater than 1.50% are not allowed.
Early Withdrawals
Prior to age 59½ (based on the younger spouse’s age for Joint Life), any withdrawal amount will reduce the protected payment base by either the amount of the withdrawal or on a proportionate basis, whichever results in the lower protected payment base. The withdrawal also may be subject to an additional 10% federal tax. If an early withdrawal reduces the account value2 to zero, the benefit will terminate, and clients will not receive the guaranteed lifetime income amount.
Excess Withdrawals
The protected payment base receives pro rata treatment. If a withdrawal exceeds the protected payment amount, the protected payment base will be reduced on a proportionate basis for the amount in excess of the protected payment amount. If a withdrawal exceeds the protected payment amount and reduces the account value to zero, the optional benefit will terminate.
RMD Friendly
If required minimum distributions (RMDs)3 are greater than the optional benefit percentage limits, Pacific Life will honor the RMD withdrawal, and future income benefits and the protected payment base will not reduce.
1Any withdrawals will reduce your account value. Optional benefit withdrawals are not annuity payouts. Annuity payouts generally receive a more favorable tax treatment than other withdrawals. Payments received prior to converting the contract to annuity payouts are treated as withdrawals and may be subject to withdrawal charges, ordinary income taxes, a possible 3.8% federal tax on net investment income for nonqualified money, and if prior to age 59½, an additional 10% federal tax. At the maximum annuity date, upon choosing a Life Only fixed annuity payout option (or Joint Life and Survivor Life Only fixed annuity payout option), you will receive the greater of a payment based on your account value or the protected payment amount as an annuity payment.
2The account value is the annuity contract value.
3If RMD amounts are not calculated and withdrawn under the Pacific Life RMD program and the withdrawal amounts are greater than the optional benefit percentage limits, future income benefits and the protected payment base may be reduced. If there is any change to the Internal Revenue Code or Treasury regulations related to RMDs, Pacific Life reserves the right to modify or eliminate the treatment of RMD withdrawals, but only to the extent necessary to comply with the change to the rules. The annual credits end if a withdrawal is taken, including an RMD withdrawal.
Maximum Issue Age: 85
Protected Income Benefit must be added at contract issue.
Investment Options
Clients can choose among all the investment options available in Pacific Odyssey® Advantage.
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Not all products or optional benefits are available in all states or firms, and features may vary by state and firm. Contact your firm or Pacific Life representative for availability.
Optional living benefits are available for an additional cost.
Pacific Life, its affiliates, distributors, and respective representatives do not provide tax, accounting or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor or attorney.
Pacific Life is a product provider. It is not a fiduciary and therefore does not give advice or make recommendations regarding insurance and investment products.
Investors should carefully consider a variable annuity’s risks, charges, limitations, and expenses, as well as the risks, charges, expenses, and investment goals of the underlying investment options. This and other information about Pacific Life are provided in the product and underlying fund prospectuses, including summary prospectuses, if available. These prospectuses should be read carefully before investing and they are available by visiting Pacificlife.com/Prospectuses.
Annuity withdrawals and other distributions of taxable amounts will be subject to ordinary income tax. Optional benefits withdrawals are not annuity payouts. Annuity payouts generally receive a more favorable tax treatment than other withdrawals. For nonqualified contracts, an additional 3.8% federal tax may apply on net investment income. If withdrawals and other distributions are taken prior to age 59½, an additional 10% federal income tax may apply. Withdrawals will reduce the account value and also may reduce the value of any optional benefits.
For newly issued contracts, the annual charge for Portfolio Income Benefit may be subject to a maximum of 2.50% (Single Life and Joint Life options), and the annual credit and lifetime withdrawal percentages are subject to change. Please refer to the latest rate sheet prospectus supplement at PacificLife.com for current rates and charges.
Please refer to the prospectus to learn how making changes to ownership, including marital status or beneficiaries, will affect the optional benefit.
Portfolio Income Benefit is named "Guaranteed Withdrawal Benefit Rider" in the contract rider.
Pacific Life reserves the right to change or modify any non-guaranteed or current elements. The right to modify these element is not limited to a specific time or reason.
Policy charges will reduce the effective rate of return on the accumulated value in the variable investment options. Policy charges may also exceed the interest credited to the accumulated value in the fixed accounts.
Pacific Life refers to Pacific Life Insurance Company and its subsidiary Pacific Life & Annuity Company. Insurance products can be issued in all states, except New York, by Pacific Life Insurance Company and in all states by Pacific Life & Annuity Company. Product/material availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.
Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company and an affiliate of Pacific Life & Annuity Company.
The home office for Pacific Life Insurance Company is located in Omaha, Nebraska. The home office for Pacific Life & Annuity Company is located in Phoenix, Arizona.
Riders will likely incur additional charges and are subject to availability, restrictions and limitations. Clients should be shown policy illustrations with and without riders to help show the rider’s impact on the policy’s values.
Contract Form Series: 10-1880, ICC24: 10-1880, 10-2880
Rider Series: 20-1002, 20-2002
State variations to contract form series and rider series may apply.
No bank guarantee • Not a deposit • Not FDIC/NCUA insured • May lose value • Not insured by any federal government agency
For financial professional use only. Not for use with the public.
26-270 VAQ5519-RIA-00 8/26 E829