Aegon Annual Report 2012

Annual Report 201235Starting in late 2009, Aegon USA reduced its sales of fixedannuities in response to lower market interest rates and lowerinvestment returns available in that environment. Similar marketconditions continued in 2010 and continue to restrict sales offixed annuities. As a result, Aegon USA decided to de-emphasizethe sale of fixed annuities.TFA provides a range of financial and investment products,operating as a retail broker-dealer registered with FINRA andan investment adviser registered with the SEC. Products offeredby TFA include mutual funds, variable life insurance, variableannuities and other securities.Employer Solutions & PensionsAegon USA offers retirement plans, pension plans, pensionrelatedproducts and services, life and supplemental healthinsurance products through employers, as well as step-by-stepguidance related to five key areas - Lifestyle, Investments, HealthCare, Protection and Income - to people who are transitioning to,or living in, retirement.Aegon USA covers a range of different retirement plans,including: 401(k) - a type of deferred compensation plan sponsored by acorporation (including subchapter S), self-employed individual,sole proprietorship, partnership or non-profit organization. 403(b) - a type of deferred compensation plan for certainemployees of public schools, employees of certaintax-exempt organizations and certain ministers. 457(b) - a type of deferred compensation plan sponsored bygovernmental and certain non-governmental employers in theUnited States. Deferred compensation plan - a plan or agreementthat defers the payment of a portion of the employee’scompensation to a future date and which may also includea contribution made by the employer for the employee’sbenefit. Money purchase - a type of defined contribution plan wherethe employer is required to make a contribution, on behalf ofthe plan participants, to the plan each year. Defined benefit - a pension plan in which an employerpromises a specified monthly benefit on retirement thatis predetermined by a formula based on the employee’searnings history, tenure of service and age. Defined contribution - a plan in which the contributions madeto the plan by the employee and/or employer are allocated tothe employee’s individual account under the plan. Examplesof defined contribution plans include 401(k) plans, 403(b)plans, money purchase plans and profit-sharing plans. Profit-sharing - a type of defined contribution plan in whichthe employer may make a contribution, on behalf of theplan participants, to the plan each year either out of thecompany’s profits or otherwise.ProductsRetirement plansDiversified Retirement Corporation (rebranded January 2013 toTransamerica Retirement Solutions Corporation) offers a widearray of investment options designed to create a fullycustomized investment line-up for clients and a personalizedretirement funding strategy for their retirement plan participants.Transamerica Retirement Solutions’ open architecture investmentplatform provides its clients access to a broad investmentuniverse, including institutional and retail mutual funds,registered or non-registered variable annuities, or a collectiveinvestment trust. The investment options offered in each planare selected by the client or the client’s financial adviser.Transamerica Retirement Solutions offers fully bundled andpartially bundled retirement plan solutions to small andmid-sized employers. These plans are predominantly supportedby a group variable annuity product, where plan assets areinvested primarily in separate account investment choices,including bond and equity investment choices, and cashequivalent choices. A fixed account cash vehicle may also beavailable on most plans. The investment choices are selected bythe client or by the client’s financial adviser.Single premium group annuitiesSingle premium group annuities (Terminal Funding) is anon-participating group annuity product. This product is usuallyused for an insurance company takeover of a terminating definedbenefit pension plan. The company receives a single deposit fromthe contract holder and in return guarantees the payment ofbenefits to participants. Usually these annuity payments are paidmonthly for the life of the participant or participant and spouse,commencing immediately for retired participants or at some datein the future for deferred participants.Life and supplemental healthTransamerica Employee Benefits offers life, supplemental healthand stop loss products.Life products include universal life insurance, whole lifeinsurance and term life insurance. Supplemental health productsinclude dental, accident, critical illness, cancer treatment,hospital indemnity and short-term disability policies. Some ofthese plans provide lump sum or specified income paymentswhen hospitalized, disabled or diagnosed with a critical illness.Other plans pay scheduled benefits for specific hospital orsurgical expenses and cancer treatments, hospice care and coverdeductible, as well as co-payment amounts, not covered by otherhealth insurance. Stop loss provides catastrophic coverage toself-insured employer health plans.Synthetic guaranteed investment contractsStable value solutions (SVS) provides synthetic guaranteedinvestment contracts (GICs) in the United States primarily totax-qualified institutional entities such as 401(k) plans and other