Why Prudential Sells the Most VAs

Constant proportion portfolio insurance, or CPPI, has helped Prudential attract crowds to its Highest Daily VA. Now other insurers are wondering if they should employ CPPI.

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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Details of the tax compromise revealed

The package would cost about $900 billion over the next two years, to be financed entirely by adding to the national debt, according to The New York Times.

Treasury to sell last of its stake in Citigroup

A person briefed on the transaction said it would be priced at $4.35 a share, a 2% percent discount. At that price, taxpayers could profit by $12 billion on the Treasury’s investment in Citigroup.

UK pensioners brace for new retirement drawdown rules

Retirees will probably be allowed to spend their savings at the rate they wish as long as they have at least enough guaranteed income to keep themselves from needing public support in retirement.

The Bucket

Late-breaking items about Sun Life, Genworth, J.P. Morgan, MetLife, the SPARK Institute, Fred Reish and Bosnia-Herzogovina.

The Tax Deal Feels Wrong

Over the weekend, retirees may have lost the first battle of the generational war.