Why is there no premium increase for Future Purchase Option (FPO) enrollees, when there is one for people with Automatic Compound Inflation Option (ACIO)?
Enrollees with the ACIO receive a 5% compounded increase to their benefits each year, but their premiums do not go up because of that benefit increase. Because ACIO enrollees are prefunding their future benefit increases, changes in certain assumptions have a larger effect on the amount of funds needed in advance to support the expected level of future benefits.(Why are premiums for current enrollees increasing?) FPO premiums are designed to increase every two years along with benefits. Because an FPO benefit does not require the same degree of prefunding, the changes to assumptions did not require an increase for enrollees with FPO.
Related Questions
- Why are enrollees with the Automatic Compound Inflation Option (ACIO) whose age at purchase was 70 or older not receiving a rate increase, while other enrollees with ACIO are?
- I am a current enrollee with the Automatic Compound Inflation Option. Would this be a good time to change to the Future Purchase Option and avoid this premium increase?
- Why is there no premium increase for Future Purchase Option (FPO) enrollees, when there is one for people with Automatic Compound Inflation Option (ACIO)?
