Contact:
June Arce
(949) 219-6916 |
For Immediate Release |
NEWPORT BEACH, Calif.—April 18, 2005—Pacific Life today announced that it is reducing advisory fees for Pacific Select Fund, an underlying investment vehicle for its variable products. Pacific Life and Pacific Life & Annuity contract owners of its variable annuity and variable life insurance products, with interests in the Fund, will benefit from this “Advisory Fee Reduction Program.”
Senior management worked with the Pacific Select Fund Board of Trustees to develop and implement this innovative, industry-first advisory fee reduction program. The Securities and Exchange Commission (SEC) issued a No-Action letter in December 2004 regarding the performance-based fee-lowering initiative.
“Pacific Life has a long history of sharing profits with contract owners through enhanced crediting rates and reductions in mortality and other charges,” said Kathleen Hunter, vice president of marketing, Annuities & Mutual Funds Division. “This is another innovation that can benefit many of our contract owners.”
The program requires Pacific Life to waive a portion of its advisory fees if the performance of the Funds exceeds a specified target return over the most recent ten years ending December 31. The fee reduction is applied to the Pacific Select Fund beginning in May of the following year, and continues for one year. If the Fund’s portfolios (in aggregate) do not exceed the target return, the usual advisory fee applies.
Pacific Life contract owners of variable annuity and life insurance products with interests in the Fund will benefit from the first fee reduction for the year beginning May 1, 2005.
According to Kathleen Hunter, Pacific Life’s average total fund fees are already below many similar variable annuity products1. “Strong fund performance has a positive impact on our profitability. The more profitable we are, the more we can share with contract owners. We also felt that it was equitable to reduce fees across all the funds’ portfolios since performance varies by year,” she said.
Founded in 1868, Pacific Life provides life insurance products, individual annuities, and mutual funds, and offers the individuals, businesses, and pension plans a variety of investment products and services. A FORTUNE 500® Company, Pacific Life counts 25 of the 50 largest U.S. companies as clients2 and is a member of IMSA (Insurance Marketplace Standards Association), whose membership promotes ethical market conduct for individual life insurance and annuities.
Variable products issued by Pacific Life Insurance Company and Pacific Life & Annuity Company are distributed by Pacific Select Distributors, Inc. (member NASD & SIPC), a subsidiary of Pacific Life and an affiliate of Pacific Life & Annuity, and are available through licensed third party broker-dealers.
1 Source: Morningstar as of 12/31/04
2 Data compiled by Pacific Life using the 2004 FORTUNE 500 list, as of April 2004. FORTUNE 500 is a registered trademark of FORTUNE Magazine, a division of Time, Inc.