The CANNEX Payout Annuity Yield (PAY) Index is a baseline measurement of the lifetime yield that a retiree can expect from an immediate income annuity. The CANNEX PAY Index can be used to compare the performance of cash flow strategies with or without the use of an immediate income annuity.
Any index – whether for stocks, bonds or real estate – is meant to be a representative indicator of the overall market, as opposed to capturing the price of a specific security or commodity for a given transaction. The same is true for the CANNEX PAY Index, which is meant to provide an indication of the lifetime yield that a retiree can expect from a single premium income annuity. The CANNEX PAY Index emphasizes actual insurance (market) quotes, and makes minimal assumptions about the current and future economic environment, the term structure of interest rates or the so-called “appetite” of insurance companies for annuity business. The CANNEX PAY Index can be replicated, tested and verified by anyone – and the component data values are made available, free of charge.