Research Roundup

We summarize four recent papers: 'Portfolios for Long-Term Investors,' 'What is the Value of Annuities?,' 'Public Economics and Inequality: Uncovering Our Social Nature,' and 'Financial and Total Wealth Inequality with Low Interest Rates.'

An Annuity’s ‘Moneyness’? There’s an App for That

How will variable annuity contract owners use their income benefits? That question is vital to annuity issuers and to fiduciary advisers with clients who own VAs. This Texas Dep't of Insurance actuary knows a product that can help them find out.

A Chip Off the Old Rock?

Bloomberg reported this week that Prudential is considering selling its retirement plan recordkeeping business. Prudential didn't confirm the report, but several industry insiders did. Low interest rates, high costs of IT makeovers, and sticky stable value fund guarantees are driving the move, RIJ was told.
Featured

Do FIAs Need Income Riders?

A guaranteed income rider makes as much sense on an FIA as it does on a VA and should not be dismissed out of hand, says Garth Bernard, president and CEO of Sharper Financial Group.

Sun Life’s New VA Riders Have New Risk Controls

Steve Deschenes, senior vice president and general manager for annuities at Sun Life Financial (U.S.), told RIJ, “This is not re-starting the variable annuity arms race. It’s a prudent tradeoff between risk management” and attractive guarantees.
News

Social Security Seeks to End Free Loans

“The agency is changing its withdrawal policy because recent media articles have promoted the use of the current policy as a means for retired beneficiaries to acquire an ‘interest-free loan,’” according to the agency.

E&Y offers four keys to success for life insurers

Life insurers "are expected to increase the ease of doing business through investments in technology and lower their resource costs through shared services, offshore captives and outsourcing," an Ernst & Young whitepaper said.

Boomers’ Inheritance Estimated at $8.4 Trillion

A study conducted by the Center for Retirement Research at Boston College for the MetLife Mature Market Institute estimates the median inheritance per person at $64,000. $2.4 trillion has already been received.

Phoenix issues “Medicaid annuity”

A Medicaid annuity allows a couple to zero out its assets, qualify for subsidized long-term care for the ill spouse and provide an income for the non-institutionalized spouse by putting money in a particular type of SPIA.

No more compulsory annuities in U.K.

People with defined contribution pension accounts will no longer have to buy annuities by age 75, and may take out up to a years’ worth of funds before retirement.

The Bucket

Late-breaking items from Guardian, New York Life, Milliman, ING, Principal, Allianz Life, EBRI, MassMutual and more...