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3. Some pension rights The liabilities of the life insurance sector, including certain financing agreements, are held as unassigned insurance assets in the retirement sectors, while others, such as individual pensions, are assets directly held by households. The term generally refers to an agreement between two parties, with the issuer offering the investor a return on a lump sum investment. Generally speaking, two parties can enter into a legally binding financing agreement and the terms will generally determine the expected use of the capital and the expected return to the investor over time. Our new treatment of securities hedging financing agreements has resulted in changes in the life insurance table (L.116), presented in abbreviated form as Table 2 below7 As noted above, prior to the release of the financial accounts in December 2015, these financing agreements were incorporated into pension entitlements, post 15, as well as all other deposit contracts.8 The new treatment reduces pension entitlements to the height of financing agreements. 9 are now presented as a separate category of different commitments, “securities hedging financing agreements,” line 20 of Table 2, while companies acquired by foreign SPEs are included as part of foreign direct investment in the United States, line 17 (as before the accounting change) 10. In addition to the abolition of funding contracts acquired by the SPEs, the financing contracts of the federal credit agencies (FHLB) were also cancelled. FHLB`s funding agreements have already been identified separately in the FHLB advances (Line 13 in Table 3). This adjustment has reduced pension rights and removed other liabilities, the residual liability category for the life insurance industry. Returns to Text Funding Agreements and other similar types of investments often have liquidity constraints and require prior notification – either by the investor or by issuing – for early withdrawal or termination of the contract. This is why agreements are often aimed at wealthy and institutional investors with substantial capitals for long-term investments. Mutual funds and pension plans often purchase financing agreements because of the security and predictability they offer.

A financing contract product requires a lump sum investment paid to the seller, which then offers the buyer a fixed rate of return over a period of time, often with the LIBOR-based return, which has become the world`s most popular benchmark for short-term interest rates. 10. In addition to the publication of financial accounts, the Federal Reserve Board also establishes further data transfers to international statistical organizations, based on the National Accounts System Reporting Guidelines (SNA 2008).

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