Suggested Maximum Rate Schedules Effective July 1, 2018
Approved by the American Council on Gift Annuities on April 24, 2018 and reconfirmed on May 30, 2019
The American Council on Gift Annuities (ACGA) Board of Directors reaffirmed its current schedule (effective July 1, 2018) of suggested maximum charitable gift annuity (CGA) rates at its Board meeting on May 30th. The ACGA regularly reviews the financial and actuarial assumptions behind its suggested maximum gift annuity rates to ensure they are fiscally responsible for charities.
Generally speaking, the ACGA's suggested maximum rates are designed to produce a target gift for charity at the conclusion of the contract equal to 50% of the funds contributed for the annuity. The rates are further predicated on the following:
 An annuitant mortality assumption equal to a 50/50 blended of male and female mortality under the 2012 Individual Annuity Reserving Table (the 2012 IAR)
 A gross investment return expectation of 4.75% (which is up from the previous return assumption of 4.25%) per year on the charity's gift annuity funds
 An expense assumption of 1% per year.
The rate schedule published below became effective on July 1, 2018. The full paper on the new ACGA rates effective July 1, 2018 is now available in electronic format free of charge to logged in ACGA members in our online store. Nonmembers may purchase a copy of the full rates paper in our online store for $75.
For more detailed information about gift annuity rates and the assumptions that underlie them, view our full rates reports, download the rates tables and access the rates brochure here.
Index
 Assumptions
 Single Life  ACGA Suggested Gift Annuity Rates
 Two Lives  ACGA Suggested Gift Annuity Rates
 Procedure for Calculating Suggested Deferred Gift Annuity Rates
 Note to Charities Issuing Deferred Gift Annuities in New York and New Jersey
Assumptions Underlying Suggested Maximum Gift Annuity Rates
Following is a summary of the major assumptions on which the suggested rates from January 1, 2012 to the present are based.
Target Residuum. Since 1955 the ACGA has targeted a residuum (the amount realized by the charity upon termination of an annuity) of 50% of the original contribution for the gift annuity. The new rate schedules retain the 50% target residuum, and continue the requirement first applied for the July 2011 rate schedules that the present value (PV) of the residuum be at least 20% of the original contribution for the annuity.
The 20% minimum PV requirement has the effect of reducing rates for annuitants age 62 and under. It is designed to help charities realize a minimum value from gifts whose residua will not be realized for many years. Rates for younger annuitants (ages 5 to 25 ) were reduced as necessary to comply with the 10% minimum charitable deduction required under IRC Sec. 514 (c)(5)(A) using the 2.8% CFMR for February 2018. Particularly in low interest rate environments, charities should perform their own deduction calculations and lower their annuity rates if necessary to meet the 10% minimum deduction requirement.
Mortality Assumptions. The National Association of Insurance Commissioners (NAIC) has recommended the use of a new mortality table for annuities issued after January 1, 2015. Known as the 2012 Individual Annuity Reserving Table (2012 IAR), the new table is designed to reflect annuitant mortality more accurately over time. ACGA commissioned a study by The Hay Group in December 2014 to determine what set of assumptions provided the best “fit” for the 2012 IAR with the ACGA Gift Annuitant Mortality Study completed in 2010. The Hay Group determined the new “best fit” assumption was a 5050 blend of the 2012 IAR male and female mortality with no age setback. (See further discussion below.)
Expense Assumption. Annual expenses for investment and administration are assumed to be 1.0% of the fair market value of gift annuity reserves.
Investment Return Assumption. The gross annual expected return on immediate payment and deferred payment gift annuity reserves is 4.75%. Both immediate and deferred payment annuity calculations use a net compounding rate of 3.75% (4.75% minus 1% assumed annual expenses).
Payment Assumption. Annual payments are made in quarterly installments at the end of each period.
The rates for the oldest ages are somewhat lower than the rates that would follow from the above assumptions. Single life rates are capped at 9.5% for annuitants age 90 and above. Single life rates for annuitants between ages 81 and 89 are graduated downward from the rate cap. Two life rates are graduated downward in a similar way.
Additional Assumption for Deferred Gift Annuities
The annual compound interest rate credited during the deferral period for deferred payment gift annuities is 3.75% (the same investment return assumption as for immediate payment gift annuities after subtracting the 1.0% expense assumption). In other words, each dollar contributed for a deferred gift annuity is presumed to grow at an annual compound interest rate of 3.75% between the date of contribution and the annuity starting date.
If payments will be made at the end of the period, which is usually the case, the annuity starting date would be at the beginning of the first period for which a payment is made. For example, if payments will be made quarterly, and the first payment will be made on September 30, 2019, the annuity starting date would be July 1, 2019. If payments will be made semiannually, the annuity starting date in this case would be April 1, 2019.
Assuming that the annuitant would be nearest age 65 on the annuity starting date, and that the period between the contribution date and the annuity starting date is 10.25 years, the compound interest factor would be 1.037510.25 or 1.458405. To determine the deferred gift annuity rate, this factor is multiplied by the immediate gift annuity rate, now in effect, for the nearest age of the annuitant at the time payments begin. In this example, the deferred gift annuity rate would be 1.458405 times 5.1%, or 7.4% (rounded to the nearest tenth of a percent).
The compounding rate during the deferral period is simply the assumed net return (total assumed return of 4.75% less 1.0% for expenses). The compounding rate applies to the entire compounding period, whatever its length. (At times in the past, the compounding rate for periods in excess of 20 years was less than the compounding rate for the first 20 years of the deferral period.)
In New York and New Jersey, it is sometimes necessary to apply a slightly lower compounding rate when the deferral period is relatively long in order not to exceed those states’ maximum allowable deferred gift annuity rates. The ACGA website contains information about New York and New Jersey requirements.
Single Life
Age 
Rate 

Age 
Rate 
515 
3.0 

73 
5.9 
1620 
3.1 
74 
6.1 

2124 
3.2 
75 
6.2 

2528 
3.3 
76 
6.4 

2934 
3.4 
77 
6.6 

3538 
3.5 
78 
6.8 

3941 
3.6 
79 
7.1 

4244 
3.7 
80 
7.3 

4547 
3.8 
81 
7.5 

4849 
3.9 
82 
7.7 

5051 
4.0 
83 
7.9 

5253 
4.1 
84 
8.1 

54 
4.2 
85 
8.3 

5556 
4.3 
86 
8.5 

57 
4.4 
87 
8.7 

58 
4.5 
88 
8.9 

59 
4.6 
89 
9.2 

6061 
4.7 
90+ 
9.5 

62 
4.8 



63 
4.9 



64 
5.0 



65 
5.1 



66 
5.2 



6768 
5.3 



69 
5.4 



70 
5.6 



71 
5.7 



72 
5.8 


NOTES:
 The rates are for ages at the nearest birthday.
 For immediate gift annuities, these rates will result in a charitable deduction of more than 10% if the CFMR is 2.8% or higher, whatever the payment frequency. If the CFMR is less than 2.8%, the deduction will be less than 10% when annuitants are below certain ages.
 For deferred gift annuities with longer deferral periods, the rates may not pass the 10% test when the CFMR is low.
 To avoid adverse tax consequences, the charity should reduce the gift annuity rate to whatever level is necessary to generate a charitable deduction in excess of 10%.
Two Lives  Joint and Survivor
Younger Age 
Older Age 
Rate 

Younger Age 
Older Age 
Rate 

Younger Age 
Older Age 
Rate 
5 
595+ 
2.8 
63 
63 
4.3 
79 
79 
6.0 

6 
695+ 
2.8 
63 
6465 
4.4 
79 
80 
6.1 

7 
795+ 
2.8 
63 
6669 
4.5 
79 
81 
6.2 

8 
895+ 
2.8 
63 
7072 
4.6 
79 
8283 
6.3 

9 
995+ 
2.8 
63 
7395+ 
4.7 
79 
84 
6.4 

10 
1095+ 
2.8 
64 
64 
4.4 
79 
8586 
6.5 

11 
1195+ 
2.8 
64 
6567 
4.5 
79 
8788 
6.6 

12 
1295+ 
2.8 
64 
6870 
4.6 
79 
8990 
6.7 

13 
1395+ 
2.8 
64 
7173 
4.7 
79 
9193 
6.8 

14 
1495+ 
2.8 
64 
7495+ 
4.8 
79 
9495+ 
6.9 

15 
1595+ 
2.8 
65 
6566 
4.5 
80 
80 
6.2 

16 
1695+ 
2.9 
65 
6768 
4.6 
80 
81 
6.3 

17 
1795+ 
2.9 
65 
6971 
4.7 
80 
82 
6.4 

18 
1895+ 
2.9 
65 
7274 
4.8 
80 
8384 
6.5 

19 
1995+ 
2.9 
65 
7595+ 
4.9 
80 
85 
6.6 

20 
2095+ 
2.9 
66 
6667 
4.6 
80 
86 
6.7 

21 
2195+ 
3.0 
66 
6869 
4.7 
80 
8788 
6.8 

22 
2295+ 
3.0 
66 
7072 
4.8 
80 
8990 
6.9 

23 
2395+ 
3.0 
66 
7374 
4.9 
80 
9192 
7.0 

24 
2495+ 
3.0 
66 
7595 
5.0 
80 
9395+ 
7.1 

25 
2595+ 
3.1 
67 
6768 
4.7 
81 
81 
6.4 

26 
2695+ 
3.1 
67 
6970 
4.8 
81 
82 
6.5 

27 
2795+ 
3.1 
67 
7172 
4.9 
81 
83 
6.6 

28 
2895+ 
3.1 
67 
7377 
5.0 
81 
84 
6.7 

29 
2995+ 
3.2 
67 
7895+ 
5.1 
81 
8586 
6.8 

30 
3095+ 
3.2 
68 
6869 
4.8 
81 
87 
6.9 

31 
3195+ 
3.2 
68 
7071 
4.9 
81 
88 
7.0 

32 
3295+ 
3.2 
68 
7274 
5.0 
81 
8990 
7.1 

33 
3395+ 
3.2 
68 
7595+ 
5.1 
81 
9192 
7.2 

34 
3495+ 
3.2 
69 
69 
4.9 
81 
9395+ 
7.3 

35 
3595+ 
3.3 
69 
7072 
5.0 
82 
82 
6.6 

36 
3695+ 
3.3 
69 
7376 
5.1 
82 
83 
6.7 

37 
3795+ 
3.3 
69 
7795+ 
5.2 
82 
84 
6.8 

38 
3895+ 
3.3 
70 
7071 
5.0 
82 
85 
6.9 

39 
3995+ 
3.4 
70 
7274 
5.1 
82 
86 
7.0 

40 
4095+ 
3.4 
70 
7577 
5.2 
82 
87 
7.1 

41 
4195+ 
3.4 
70 
7881 
5.3 
82 
88 
7.2 

42 
4295+ 
3.5 
70 
8295+ 
5.4 
82 
8990 
7.3 

43 
4395+ 
3.5 
71 
7172 
5.1 
82 
91 
7.4 

44 
4495+ 
3.5 
71 
7375 
5.2 
82 
9295+ 
7.5 

45 
4547 
3.5 
71 
7678 
5.3 
83 
83 
6.8 

45 
4895+ 
3.6 
71 
7981 
5.4 
83 
84 
6.9 

46 
46 
3.5 
71 
8295+ 
5.5 
83 
85 
7.1 

46 
4795+ 
3.6 
72 
7274 
5.2 
83 
86 
7.2 

47 
4795+ 
3.6 
72 
7576 
5.3 
83 
87 
7.3 

48 
4850 
3.6 
72 
7779 
5.4 
83 
88 
7.4 

48 
5195+ 
3.7 
72 
8082 
5.5 
83 
8990 
7.5 

49 
49 
3.6 
72 
8395+ 
5.6 
83 
91 
7.6 

49 
5095+ 
3.7 
73 
7374 
5.3 
83 
9295+ 
7.7 

50 
5054 
3.7 
73 
7577 
5.4 
84 
84 
7.1 

50 
5595+ 
3.8 
73 
7879 
5.5 
84 
85 
7.2 

51 
5153 
3.7 
73 
8082 
5.6 
84 
86 
7.3 

51 
5495+ 
3.8 
73 
8395+ 
5.7 
84 
87 
7.4 

52 
52 
3.7 
74 
7475 
5.4 
84 
88 
7.6 

52 
5357 
3.8 
74 
7677 
5.5 
84 
89 
7.7 

52 
5895+ 
3.9 
74 
7879 
5.6 
84 
9091 
7.8 

53 
5356 
3.8 
74 
8082 
5.7 
84 
9295+ 
7.9 

53 
5795+ 
3.9 
74 
8385 
5.8 
85 
85 
7.3 

54 
5455 
3.8 
74 
8695+ 
5.9 
85 
86 
7.5 

54 
5660 
3.9 
75 
7576 
5.5 
85 
87 
7.6 

54 
6195+ 
4.0 
75 
7778 
5.6 
85 
88 
7.7 

55 
5558 
3.9 
75 
7980 
5.7 
85 
89 
7.9 

55 
5964 
4.0 
75 
8182 
5.8 
85 
90 
8.0 

55 
6595+ 
4.1 
75 
8384 
5.9 
85 
9195+ 
8.1 

56 
5657 
3.9 
75 
8595+ 
6.0 
86 
86 
7.6 

56 
5861 
4.0 
76 
76 
5.6 
86 
87 
7.8 

56 
6295+ 
4.1 
76 
7778 
5.7 
86 
88 
7.9 

57 
5760 
4.0 
76 
7980 
5.8 
86 
89 
8.1 

57 
6165 
4.1 
76 
8182 
5.9 
86 
90 
8.2 

57 
6695+ 
4.2 
76 
8384 
6.0 
86 
9195+ 
8.3 

58 
5859 
4.0 
76 
8586 
6.1 
87 
87 
8.0 

58 
6063 
4.1 
76 
8795+ 
6.2 
87 
88 
8.1 

58 
6467 
4.2 
77 
77 
5.7 
87 
89 
8.3 

58 
6895+ 
4.3 
77 
78 
5.8 
87 
90 
8.4 

59 
5961 
4.1 
77 
7980 
5.9 
87 
9195+ 
8.5 

59 
6265 
4.2 
77 
8182 
6.0 
88 
88 
8.3 

59 
6670 
4.3 
77 
83 
6.1 
88 
89 
8.5 

59 
7195+ 
4.4 
77 
8485 
6.2 
88 
9095+ 
8.7 

60 
60 
4.1 
77 
8688 
6.3 
89 
89 
8.7 

60 
6163 
4.2 
77 
8995+ 
6.4 
89 
90 
8.9 

60 
6467 
4.3 
78 
7879 
5.9 
89 
9195+ 
9.0 

60 
6872 
4.4 
78 
80 
6.0 
90 
90 
9.1 

60 
7395+ 
4.5 
78 
81 
6.1 
90 
9195+ 
9.3 

61 
6162 
4.2 
78 
8283 
6.2 
91 
9195+ 
9.3 

61 
6365 
4.3 
78 
8485 
6.3 
92 
9295+ 
9.3 

61 
6669 
4.4 
78 
8687 
6.4 
93 
9395+ 
9.3 

61 
7095+ 
4.5 
78 
8889 
6.5 
94 
9495+ 
9.3 

62 
6264 
4.3 
78 
9095+ 
6.6 
95+ 
95+ 
9.3 

62 
6567 
4.4 

62 
6871 
4.5 







62 
7295+ 
4.6 






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Procedure for Calculating Suggested Deferred Gift Annuity Rates
Approved by the American Council on Gift AnnuitiesEffective July 1, 2018 (New York & New Jersey see note below)
 Determine the annuity starting date, which is:
 One year before the first payment, if payments are made annually.
 Six months before the first payment, if payments are made semiannually.
 Three months before the first payment, if payments are made quarterly.
 One month before the first payment, if payments are made monthly.
 Determine the number of whole and fractional years from the date of the contribution to the annuity starting date (the deferral period).Express the fractional year to four decimal places.
 For a deferral period of any length, use the following formula to determine the compound interest factor:
 F = 1.0375 ^{d}, where
 F is the compound interest factor and
 d is the deferral period
Example: If the period between the contribution date and the annuity starting date is 10.25 years, the compound interest factor would be 1.0375^{10.25}= 1.458405
 Multiply the compound interest factor (F) by the immediate gift annuity rate for the nearest age or ages of a person or persons at the annuity starting date.
Example: If the sole annuitant will be nearest age 65 on the annuity starting date and the compound interest factor is 1.458405, the deferred gift annuity rate would be 1.458405 times 5.1%, or 7.4% (rounded to the nearest tenth of a percent).
Comments:
 The annuity starting date for purposes of calculating the deferred gift annuity rate will be the same as the annuity starting date for calculating the charitable deduction, if payments are at the end of the period (which is usually the case).This was not true with the preJuly 1, 2001 methodology.
 An annuitant is credited with compound interest for the entire period from the date of contribution to the annuity starting date.Under the preJuly, 2001 methodology, compound interest was credited only for the number of whole years between the two dates.
 Charities issuing deferred gift annuities in New York and New Jersey may need to use a slightly lower compounding rate depending on the deferral period.
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Note to Charities Issuing Deferred Gift Annuities in New York and New Jersey*
Approved by the American Council on Gift Annuities  Effective July 1, 2018
The following compound interest factors during the deferral period noted will satisfy the requirements of New York and New Jersey:
For all deferral periods:
Singlelife and twolife annuities, whatever the gender of the annuitants, a compound interest factor of 3.75%.
*New York and New Jersey are the two states known at this time that may require different interest factors for deferred gift annuities with longer deferral periods.
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