England’s Search for a DC/DB Hybrid

The U.K.’s pension ministry has proposed ‘defined ambition’ as a remedy for the country’s retirement savings ills. ‘DA’ is a hybrid of DC and DB, but remains otherwise undefined. Pictured: A worker at a Morrisons supermarket in Britain.

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.
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News

Sun Life downgrade follows Guggenheim deal

The rating actions follow the December 17, 2012 announcement by SLF of its agreement to sell its U.S. annuity and certain life insurance business lines to a Guggenheim Partners-led investor group for approximately $1.35 billion.

Morgan Stanley expects fiscal cliff to be hardly a speed bump

Central banks in developed countries are holding short-term rates down to induce investors to shift into riskier, higher-yielding assets, says Morgan Stanley's Global Investment Committee Monthly report for December. The bank says it doesn't intend to 'fight the Fed.'

The Bucket

Brief or late-breaking items from MetLife, Thrivent for Lutherans, The Financial Planning Association, Towers Watson, Cogent Research, Security Benefit and the New York Stock Exchange.

RIJ will not publish next week

Retirement Income Journal and RIJAdvisor will not be published during the week of December 24-28, in observance of the holidays. We thank all of our subscribers and advertisers for their support of our mission during the past 12 months and for helping make 2012 our best year yet. We'll see you in the New Year.