Term Annuity
Term Annuity

Term Annuity

This is a regular monthly payment to you (the annuitant), usually after retirement, for a fixed term of either 5, 10 or 15 years. The annuitant is the person that chooses to convert his/her savings to purchase the term annuity.


You need to be aware that at the end of the term, be it 5, 10 or 15 years, no further payments will be made to you. If you would prefer to get a pension income for the rest of your life, you should consider a new life pension instead.

Term Annuity Rates (Effective 4 July 2022)

i. Term annuity conversion factors differ only on term, not on age.
ii. Pricing of term annuities depends on market conditions.
iii. Once purchased, the payment will not change, regardless of subsequent developments.

Term Rate

5 YEARS20.4%
10 YEARS11.2%
15 YEARS8.4%


The payments are guaranteed for the period opted for by the annuitant. For instance, if you are opting for a 5 year term annuity, the guarantee is for 5 years, for 10 year term it is for 10 years etc.

Guarantee means that should you die before the end of the fixed term, then the remaining payments for the stated term will continue to the person nominated by you for this purpose (the nominee).


Your nominee can apply to have the remaining installments exchanged for a lump sum at a rate set by the FNPF after taking actuarial advice. At the end of the term, payments cease, and no further liability to the FNPF arises.

If you fail to nominate someone to receive your funds in the event of your death, the funds will be transferred to the High Court who will then decide who will receive these funds. As such, to ensure that your funds are paid to the person of your choice, you must formally nominate them at the time you exercise your retirement option.

Monthly Pension Calculation

The monthly annuity is one-twelfth of the amount converted to annuity by the FNPF member multiply by the term annuity conversion rate.

*Monthly pension=(Total Pensionable Amount* term rates)/12


The term annuity can be obtained on retirement (when you turn 55, or under medical conditions).

Benefits of Term Annuity

  • The annuity is tax-free under current tax rules
  • Best Rates
  • No administration fee

Payment Options

  • All pensions will be paid by electronic funds transfer to your bank except for pensioners who live in the islands and do not have access to a bank.
  • Previously other modes of payment were possible, but these will be restricted to those living in the outer islands and payments will be made monthly.