Sales of variable annuities declined significantly during this year's first quarter compared to the last quarter of 2007, says NAVA Inc., the Reston, Va.-based national association representing the variable annuity industry.

   Net sales of variable annuities, which make up a large portion of modern pension plans, sank by 19% in the first quarter, to $7.2 billion versus $8.9 billion in the final quarter of last year. The decline is even greater when compared to net sales of $9.37 billion in the third quarter of 2007. Still, first quarter 2008 sales were greater than the $6.2 billion in the first quarter of 2007.

   Total sales, which include surrenders, withdrawals and benefit payments that are not part of the net sales data, dropped 13% in the first quarter, to $41.6 billion versus $47.8 billion in last year's fourth quarter. Total sales in the first quarter of 2007 were $40.9 billion.

   Michael DeGeorge, NAVA vice president and general counsel, cautions against reading too much into figures for one quarter. "Variable annuities offer features that encourage people to stay invested," he says. "The long-term equity market has produced the highest returns and should give people confidence to stay in the market, even though it is having problems now. The decreases are probably reflective of the economy in general where there is less money to invest. Sales figures are up from the same period a year ago."