26-YEAR STATISTICAL RECORD OF PERIODIC PAYMENT PLANS-$20, $50, AND $100 DENOMINATIONS These three denominations provide for 120 (or 180) monthly payments in four different mutual funds offered by the Sponsor Company respectively 129,136 93,752 $308,329,690 $394,885,378 20,934 $23,577,530 $19,833,480 2 Total 17-YEAR STATISTICAL RECORD OF PLANS (ALL DENOMINATIONS) ISSUED BY ANOTHER LEADING SPONSOR COMPANY Set forth below is the statistical record, year by year, from the first year of offering (1949) to August 31, 1965, of all plans sponsored by this Company. I-74.3% (or 167,436) of the accounts opened between 1949 and 1965 were still in force at August 31, 1965. II-15.5% (or 34,834 accounts) terminated with profits aggregating $48,034,089, an average of $1,379 per account. III-10.2% (or 23,048 accounts) terminated with losses aggregating $4,105,796, an average of $178 per account. Current termination figures The latest figures on the industry's rate of terminated accounts in relation to the number of accounts opened during the period January 1954 through December 1965were contributed by 26 Sponsors. In the case of each Sponsor, terminations included all plan denominations. The periods were limited to five years or less since studies covering longer periods indicate that after the fifth year, the termination rate (with losses) decreases materially, or is non-existent. Consolidated Statistics on Terminated Accounts with Losses COMMENT: During the period between January 1954 and December 1961 in which 8 consecutive full five-year periods are shown, 865,482 accounts were started. Of this number, 141,405 were terminated with losses, an average of 16.34% of the total accounts started within the aforesaid periods. Association of Mutual Fund Plan Sponsors, Inc. 50 East 42nd Street New York, New York 10017 Gentlemen: Termination statistics of Contractual Plan Accounts (plans terminated with losses within five years or less after their inception) as set forth in the above table covering full five-year periods 1954 through 1961 and the periods January 1, 1962 through December 31, 1965 were compiled from statistics furnished the Association of Mutual Fund Plan Sponsors, Inc., by member Sponsor-companies of that Association and by some non-members. While no detailed examination was made of the statistical analyses, we consider the tabulation as presented to represent fairly the statistics submitted by industry members. September 7, 1966 TAIT, WELLER & BAKER Consolidated Analysis of all Accounts Opened in a Specified Year (footnote (2)) by four major Contractual Plan Companies Currently Open Accounts Accounts Terminated with a Loss Amount Rec'd Accounts Terminated with a Gain Number of Amount Paid-In Amount Rec'd on Termination Number of 2,759 1- 12 740 $ 171,016 $ 294,624 464 $ 189,547 $ 263,500 1,555 $241,542 $ 170,343 1,346 13- 24 469 353,711 586,976 350 289,915 408,312 527 307,062 246,804 1,080 25-36 335 397,741 671,919 432 580,499 780,508 313 257,587 229,720 995 37-48 327 549,421 898,177 407 709,136 949,213 261 321,323 282,538 827 49-60 292 594,439 983,798 381 841,325 1,107,707 154 220,290 204,940 747 61-72 256 701,568 1,161,397 436 940,874 1,199,865 55 95.057 88,746 640 73-84 283 822,997 1,376,501 347 857,793 1,127,674 10 18,710 17,663 2,542 85-96(1) 1,531 6,080,604 14,047,547 987 3,590,269 6,244,606 24 101,260 436 97-108 200 714,988 973,033 231 702,145 30,261 94,363 5,391 109-120(1) 4,599 17,202,490 24,622,643 747 2,557,011 3,477,632 45 160,674 150,731 35 121-132 23 89,075 134,910 12 30,585 43,946 -0 143,050 1,068,195 9,359 $28,889,295 223,499 2,032,587 $48,007,611 664,804(3) $48,672,415 12 36,980 54,793 -0 -α - 63 221,210 326,389 4 10,500 10,143 4,869 $11,547,289 $16,923,919 2.953 $1.764,266 $1,523,821 (1) of the four companies analyzed, one offered a plan covering an 8 year program (96 payments), two companies offered 10 year programs (120 payments), and one a program for 121⁄2 years (150 payments). (2) The year of issuance for three of the companies analyzed was 1953 and for the other 1951. The status and value dates used were different for each company; August, September, or October of 1963 for three companies and December 1962 for the other. (3) Represents proceeds of partial liquidations on open accounts; breakdown by payment category not available. COMMENTARY A-Of the 17,181 accounts issued, 9,359 or 54.5% were still in force after periods from 10 to 13 years, showing values in excess of payments of $19,780,000 (68.5% in excess of the total of their payments made). B-Of the 17,181 accounts issued, 4,869 or 28.3% had terminated at values in excess of payments of $5,376,000 (46.6% in excess of the total of their payments). -Some 2,953 accounts had terminated with loss, representing 17.2% of the 17,181 accounts issued. The total loss involved was $240,400 (13.6% less than their total payments). Despite the fact that this study, due to time and preparation requirements has not been up-dated, it has been included because of its statistical value. Accounts in arrears In evaluating the experience of the $20, $50, and $100 monthly-payment denominations (appearing on page 2 of this supplement), the following might be asked: (a) Of the 93,752 accounts in force at December 31, 1965, what percentage of these were in arrears? (having made no payment for a year, or more) (b) To what extent would the termination percentages have been increased had the Plan Sponsor and/or Custodian invoked termination prior to December 31, 1965 on those accounts one year, or more in arrears? Shown below according to their year of issuance, are the number of accounts which at December 31, 1965 had made no payment for a year, or more and therefore could be considered in arrears. |