ASSUMPTIONS FOR IMMEDIATE GIFT ANNUITIES

Approved by the American Council on Gift Annuities
April 10, 2002
Effective July 1, 2002 to December 31, 2002

	2001 Rates			2002 Rates
1.	50% Residuum		1.	50% Residuum
2.	Life expectancy based on the Annuity 2000 Mortality Table for female lives with a 1.0 year setback in ages. Projections for increased life expectancies.		2.	Life expectancy based on the Annuity 2000 Mortality Tables for female lives with a 1.5 year setback in ages. Projections for increased life expectancies.
3.	Annual expenses for investment and administration are .75%.		3.	Annual expenses for investment and administration are 1.0%.
4.	Total annual return on reserves is 6.50%.		4.	Total annual return on reserves is 6.75%.
5.	Rates for youngest and oldest ages based on lower assumed returns.		5.	Rates for youngest and oldest ages based on lower assumed returns.

The net return (total assumed return minus assumed expenses) turns out to be the same for the 2001 and 2002 rates. The increase of 25 basis points for expenses was offset by an increase of 25 basis points in the assumed return. Thus, the only net material change in the assumptions is slightly increasing life expectancies by setting ages back 1.5 years instead of 1.0 years. This change would reduce rates .1% to .2%. Although such a rate reduction is justified by the mortality study, the Gift Annuity Rates Committee and ACGA board decided that such a slight adjustment would not justify the resultant cost and disruption to charities and vendors.

ADDITIONAL ASSUMPTIONS FOR DEFERRED GIFT ANNUITIES

	2001 Rates			2002 Rates
1.	Annual compound interest rate credited during the deferral period: 1 - 20 years - 6.50% 20+ - 25 years - 6.25% 25+ - 30 years - 6.0% 30+ years - 5.0%		1.	Annual compound interest rate credited during the deferral period: 1 - 20 years - 6.75% 20+ - 25 years - 6.50% 25+ - 30 years - 6.25% 30+ years - 5.25%
2.	Annual expenses for investment and administration are .75%.		2.	Annual expenses for investment and administration are 1.0%
3.	Net total compound interest credited during deferral period: 1 - 20 years - 5.75% 20+ - 25 years - 5.50% 25+ - 30 years - 5.25% 30+ years - 5.00%		3.	Net total compound interest credited during deferral period: 1 - 20 years - 5.75% 20+ - 25 years - 5.50% 25+ - 30 years - 5.25% 30+ years - 5.00%

Since the net compound interest credited during the deferral period did not change, the 2002 deferred gift annuity rates will be the same as the 2001 rates.

ACGA Rates Committee
American Council on Gift Annuities
April 10, 2002

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