1. The return that will be earned over the life of an annuity:

is taxable to the purchaser on a current basis as the annuity value increases.

is nontaxable to the purchaser if received after age 59 1/2.

may decrease over time, owing to the increasing surrender charge.

depends on the interest rate, the surrender charge, and administrative expenses.

2. Under a deferred profit sharing plan

there is no requirement that the level of contributions be fixed.

there is no requirement that the plan be funded.

vesting requirements are less stringent than for pension plans.

there is no tax benefit to the covered employees.