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Quote of the Week
Tue, May 01, 2012
"Life is really quite stochastic in nature." -- Robert O'Donnell, president, Prudential Annuities, addressing the 2012 Retirement Industry Conference in Orlando, April 26.
Regulations/Legal
One-Time Crusader Breaks Bad
Tue, Apr 17, 2012
Matthew Hutcheson, who portrayed himself as a champion of fuduciary responsibility, was indicted by a federal grand jury last week in Boise, Idaho, on charges of stealing millions of dollars from a multi-employer retirement plan of which he was the trustee.
St. Louis Fed president questions U.S. monetary policy
Tue, Apr 10, 2012
"Monetary policy is a blunt instrument which affects the decision-making of everyone in the economy,” said James Ballard, pointing out that low interest rates hurt savers. Better to address unemployment directly than through monetary policy, he added.
GAO recommends task force to promote micro retirement plans
Wed, Mar 28, 2012
Only 14% of small employers--for-profit firms that employ 100 or fewer people--sponsor some type of retirement plan, according to a new GAO report.
Summary of proposals in Obama budget
Tue, Feb 21, 2012
Here are proposals in the new Obama budget that are likely to affect members of the financial, insurance or retirement planning industries.
Patently Controversial
Tue, Feb 21, 2012
Lincoln National Life has received a new patent on its GLWB process, raising concerns that it might once again seek royalties from other VA issuers.
An Interview with David Wray
Wed, Feb 08, 2012
Don't expect participants to revolt when they see how high their 401k fees are, and don't expect 12b-1 fees to disappear, said the president of the PSCA. But the problem of 'fee bracket creep' should be fixed by new federal rules.
Vocal reactions to the New 401(k) Rules
Wed, Feb 08, 2012
Professionals from across the retirement income industry express their views of the DoL/Treasury announcement last week on fee disclosure and annuities.
Federal Reserve favors more predictability on rates
Wed, Jan 04, 2012
But “a number of members noted their dissatisfaction with the Committee's current approach for communicating its views regarding the appropriate path for monetary policy,” said the minutes of the Dec. 13 FOMC meeting, published this week.
Could “Obamacare” encourage earlier retirement?
Wed, Jan 04, 2012
A review of Towers Watson retirement data shows that the presence of company-subsidized health insurance for retirees encourages people to retire before age 65. Researchers wonder if elements of "Obamacare"--the PPACA--could have a similar effect.
“Simpson-Bowles” reforms would reduce middle-class Social Security receipts: Urban Institute
Wed, Dec 14, 2011
Projected Social Security benefit reductions under the NCFRR recommendations are closely related to lifetime earnings, with those at the bottom of the lifetime earnings distribution largely shielded and those at the top experiencing significant reductions.
Thoughts on DoL's "Re-Proposal"
Wed, Nov 30, 2011
Noticeably absent from the DOL’s September 19th release, and statements by DOL officials, is any suggestion of a broad revision of the regulation, writes Fred Reish, the well-known ERISA attorney at Drinker, Biddle & Reath.
‘Individual mandate’ constitutional, U.S. appeals court says
Wed, Nov 09, 2011
“The right to be free from federal regulation is not absolute, and yields to the imperative that Congress be free to forge national solutions to national problems, no matter how local–or seemingly passive–their individual origins,” said the majority opinion.
Mercer adopts Financial Engines’ Income+ program
Wed, Nov 02, 2011
In contrast to Prudential’s IncomeFlex or Hartford’s Lifetime Income, which involve purchases of insurance products prior to leaving the plan, Income+ offers an optional “out of plan” purchase of a life annuity after rollover.
Gov. Perry's tax plan, analyzed
Wed, Nov 02, 2011
The Tax Policy Center estimates that the Perry plan would lower federal tax liability by $995 billion in calendar year 2015 compared with current law, roughly a 27 percent cut in total projected revenue.
Courts favor fiduciaries in suit over “imprudent” plan investments
Wed, Oct 05, 2011
Plan sponsors and fiduciaries have won another case at the U.S. Court of Appeals for the 7th Circuit—the third this year.
SEC weighs action against Standard & Poor’s
Wed, Sep 28, 2011
The SEC enforcement staff sent S&P a Wells notice, which gives companies the chance to make the case why charges are unwarranted.
DoL releases “interim guidance” on electronic delivery of disclosures
Wed, Sep 21, 2011
For retirement plans that must disclose general plan and investment information to participants starting May 31, 2012, the Department of Labor offered two viable approaches regarding information delivery.
Political Football
Tue, Sep 20, 2011
The Dept. of Labor's bid to strengthen the fiduciary standard for advisers to retirement plans and IRAs became a political football. Now the DoL has agreed to revise and "re-propose" its proposal. Was the football fumbled... or stripped?
12 Retirement Plan Concepts Financial Advisors Must Know
Wed, Sep 14, 2011
In this article, an ERISA attorney sets out to help retirement plan advisors understand basic retirement plan concepts that can help them develop and maintain their retirement plan book of business.
Who Is 'Too Big to Fail'?
Tue, Sep 06, 2011
Concerned that your insurance company might be designated a SIFI (Systemically Important Financial Institution)? Then read Deloitte's primer on SIFIs. Here's a synopsis and a link.
Repealing ‘Obamacare’ Would Bring Back ‘Donut Hole’—EBRI
Tue, Aug 30, 2011
“Medicare beneficiaries with high outpatient drug use would be most affected by repeal and would need to save an additional roughly 30‒40 percent to make up the shortfall,” said EBRI’s Paul Fronstin, lead author of the report.
NAIC ponders regs on separate accounts
Wed, Aug 24, 2011
What, if any, variable product guarantees would be covered by a guaranty association, the regulators want to know.
IRS seeks discussion on annuity – LTC hybrids
Tue, Aug 16, 2011
Although taxpayers are allowed to make the exchanges, they have not been sure how to report the exchanges, or how the exchanges might affect their income taxes.
Going with the regulatory flow
Tue, Aug 09, 2011
In announcing new fund offerings for DC plans, Securian and BlackRock noted that they're trying to meet plan sponsor demand for greater fiduciary responsibility and lower investment costs.
Policy analyst critiques debt ceiling agreement
Tue, Aug 02, 2011
Here’s an edited version of an analysis of the new agreement on deficit and debt reduction by Robert Greenstein, president of the Center for Budget and Policy Priorities.
Voters of all stripes want Wall Street swept clean
Tue, Jul 19, 2011
A poll sponsored by AARP and others found that 83% of Democrats, 73% of independents and 68% of Republicans favor a single federal agency dedicated to protecting consumers from financial fraud and misconduct.
Actuary to Congress: Raise SS retirement age
Wed, Jul 13, 2011
Even in 1940, however, men who reached age 65 had an average life expectancy of 12.7 years—meaning that half lived longer than that. (Albus Dumbledore was nearly 116 years old when Severus Snape killed him.)
Are the asset allocation models used in 401(k) plans subject to DoL disclosure requirements?
Wed, Jul 06, 2011
Probably, says ERISA expert Fred Reish--but not if the model is managed by a 'discretionary fiduciary.'
DALBAR announces fiduciary designation for 401(k) advisors
Wed, Jun 29, 2011
The 401(k) RFTM Designation is awarded to designees who after training and testing prove to be fluent in the language and regulations of ERISA.
SEC "starved of resources": New Yorker
Wed, Jun 29, 2011
"The market has become more of an exclusive gambling club for the very rich than a level playing field open to the ordinary investor," wrote journalist George Packer.
Wolters Kluwer weighs in on Supreme Court’s Janus decision
Thu, Jun 16, 2011
In its 5-4 decision on Janus Capital Group, Inc. v. First Derivatives Traders, a lawsuit first filed in 2003, the high court held that liability for allegedly misleading statements in Janus' mutual fund prospectuses did not extend to the funds' investment advisers.
Fed governor details rationale for higher capital standards for “SIFIs”
Sun, Jun 05, 2011
Regulations should limit the creation or growth of giant financial institutions unless the “benefits to society are clearly significant,” said Daniel Tarullo.
Taxes deferred aren’t taxes denied: ASPPA
Tue, May 31, 2011
In their attacks on retirement savings incentives, 'budget hawks' don't appear to realize that 401(k) participants and others pay the deferred taxes after they retire, albeit sometimes at a lower tax rate.
An Industry Awaits Fee Transparency Rule with Trepidation
Tue, Apr 19, 2011
“This new ERISA 408(b)(2) disclosure has a bite to it," writes Louis Harvey of Dalbar in DSG Dimensions. ERISA attorney Fred Reish (left) estimates that 401(k) fee transparency rule would be effective "April 1 to July 1, 2012.”
Republican budget manifesto released
Wed, Apr 06, 2011
The top individual and corporate tax rate would drop to 25% from 35% under the "Path to Prosperity" proposal written by House budget committee chairman Paul Ryan (R-WI).
One Reason the Crisis Got So Bad
Wed, Apr 06, 2011
Banks needed to reserve 4% for mortgage loans, but only 1.60% for mortgage-backed securities issued by Fannie Mae or Freddie Mac. So banks loaded up on MBSs. A second excerpt from the newly-published "Guaranteed to Fail" (Princeton University Press, 2011).
Pension Debate Roils Japan
Mon, Feb 28, 2011
In January, the ruling party suggested that the public pension should be funded with payroll deductions, and that there should be a taxpayer-funded guaranteed minimum benefit of ¥70,000 ($860) per month for the poor.
Rule 408(b)(2) delayed until 2012
Wed, Feb 16, 2011
“We now believe plans and plan service providers would benefit from an extension of the rules applicability date,” said assistant Labor Secretary Phyllis Borzi in a statement.
What the ‘Lifetime Income Disclosure Act’ may mean for you
Wed, Feb 09, 2011
The bill would require benefit statements to include the annuity equivalent of an employee’s benefit, while providing a "clear path to avoid liability."
SEC Staff Recommends Uniform Fiduciary Standard
Wed, Jan 26, 2011
All those who give “personalized investment advice about securities to retail customers” should put the clients' interest above their own, the SEC staff recommends.
The New Madoff Windfall
Wed, Jan 26, 2011
Our occasional columnist explains why hedge funds are scooping up discounted claims against jailed Ponzi artist Bernard Madoff.
U.S. Treasury now owns AIG
Wed, Jan 19, 2011
“We continue to believe [taxpayers] will realize a profit on their investment in AIG,” said Robert H. Benmosche, AIG president and CEO.
Bank of America Settles Fannie-Freddie Claims
Tue, Jan 04, 2011
The agreements center on loans that Countrywide Financial, which was purchased by Bank of America in 2008, sold to the two agencies.
States Have Mandate, But Not Money, To Oversee Mid-Sized Advisors
Tue, Jan 04, 2011
California, Florida, New York and Texas will account for 35% of all the advisory firms switching over to state regulation, according to National Regulatory Services, a Connecticut consulting firm.
For capital gains tax, the “honor system” ends January 1
Tue, Dec 28, 2010
Before the new rule, the government didn’t have a way to verify if an investor was reporting the true gain on a sale unless there was an audit, said an Ernst & Young tax partner.
SEC seeks comments on credit rating standardization
Tue, Dec 28, 2010
The SEC is conducting a study, required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, to investigate the feasibility and desirability of standardizing credit rating methods and terminology.
An alert from SPARK Institute on participant fee disclosure
Tue, Dec 21, 2010
Plan sponsors are required to provide participants with information about all of their plans’ investment options in a single chart or similar format, said SPARK general counsel Larry Goldbrum.
New Tax Relief Bill Summarized by FPA, CCH
Tue, Dec 21, 2010
The payroll tax holiday alone is estimated to inject $120 billion into the economy in 2011.
HR 4337 modernizes tax code treatment of investment firms
Tue, Dec 21, 2010
A new white paper from Wolters Kluwer Law & Business details the elements of the law.
