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Classic tontines are rare today, but the idea behind them, longevity pooling, is available in regulated form. In Canada, the Purpose Longevity Pension Fund (2021) uses it. In the U.S., the Savvly 80+ Fund is not a tontine, but it is a closed-end fund registered with the SEC that uses longevity pooling, investing in the S&P 500 and making milestone payouts at ages 80, 85, 90 and 95.
A tontine is a shared investment pool. Members pay in, and as members die or leave, their share is divided among those who remain. Those who live longest receive the most. The idea is credited to Lorenzo de Tonti, an Italian banker who proposed it in France in 1653, and governments used tontines to raise money for centuries.
In the late 1800s, U.S. insurers sold “tontine insurance” on a huge scale. Abuses, including missed payments that wiped out savings and profits diverted to insiders, led to New York’s Armstrong Investigation in 1905 and to reforms that restricted these policies. The problem was opaque terms and weak oversight, not the pooling idea itself.
Economists have long argued that pooling longevity risk is an efficient way to fund late life, and regulated versions have returned. Europe’s pan-European pension rules allow tontine-style products, the UK has collective defined contribution pensions, and Canada has longevity funds sold through licensed dealers. Modern versions add what the old tontines lacked: regulation, independent custody, disclosure and clear rules for leaving early.
The Savvly 80+ Fund is not a tontine. It uses the same math as an annuity, but without the insurance company, under an SEC-registered framework: when investors leave before a milestone, their unused share may be allocated to those who remain. The differences:
The Savvly 80+ Fund, used by the Savvly Longevity Benefit, is not insurance and not an annuity, and payout amounts are not guaranteed. For more on the category, see What Are Longevity-Linked Securities?
Longevity pooling is permitted inside regulated structures. The Savvly 80+ Fund is not a tontine; it is registered with the SEC and operates under an SEC exemptive order.
Your estate receives the early-withdrawal amount under the Return of Deposit Rule.
It is sold through Canadian dealers. Check with the provider and a financial professional.
Related: What Is a Longevity Benefit? · Is There an Alternative to an Annuity for Late-Life Income? · What Are Longevity-Linked Securities?
Disclosures
The information on this page is provided for educational purposes only and is not intended as investment, legal, or tax advice. It is designed solely to illustrate how longevity-linked investment benefits may work under certain assumptions. Actual results will vary. All illustrations, examples, and case studies are hypothetical and are intended to demonstrate potential scenarios — not to predict or guarantee actual outcomes. They do not represent the performance of any individual investor, portfolio, or account.
Key Assumptions Used in the Illustrations
Life expectancy and mortality projections are based on the most recent Social Security Administration (SSA) tables available at the time of simulation.
In the event of death or early withdrawal, hypothetical scenarios assume that investors who exit early, or their estate in the event of death, may receive 75% of the lesser of the initial investment or current market value, plus 1% for each full year the account was active. Case studies assume standardized market growth of 8% annually and do not incorporate unexpected market volatility, inflation, changes in interest rates, or changes in an investor's personal circumstances.
Simulations may assume a 3% annual early withdrawal rate prior to payout or death. All figures shown are net of fees. No forecast, projection, or hypothetical return should be relied upon as a promise or representation of future performance.
Past performance is not indicative of future results. The 8% annual market growth rate used in illustrations is a standardized assumption for modeling purposes only and does not represent the historical or expected performance of any specific investment. Note that early or voluntary withdrawals by other participants can affect fund performance and the size of distributions, and that a higher-than-expected number of participants reaching payout milestones may reduce the per-participant benefit received.
The Savvly Longevity Benefit is not a bank product, not FDIC insured, not insured by any federal government agency, and not insurance; payout amounts are not guaranteed. Investment values may decline.
The Savvly Longevity Benefit may not be suitable for all investors. Eligibility to invest is subject to qualification requirements and not all investors will be eligible. Investors should carefully consider their investment objectives, risk tolerance, time horizon, and financial situation before investing. See savvly.com/disclosures for current eligibility criteria, fees, risks, withdrawal terms, and fund assumptions.
This content is published by Savvly, Inc. Savvly has a financial interest in the products described and this content should not be interpreted as independent financial research or analysis. Investors should carefully evaluate their own circumstances and consult a qualified financial professional before making any investment decision.
