De-Risky Business
Squeezed by low interest rates, variable annuity issuers have no choice but to keep trimming their benefits. In this review, a VA expert surveys the summertime activity of (and skuttlebutt related to) major manufacturers.
New York Life Remixes the Variable Annuity
You've heard of New York Life's Guaranteed Future Income, where clients pay today for lifetime income several years from now. A new NYL product, Income Plus, also locks in future income, but lets policyholders put some money at risk during the waiting period, a recent prospectus shows.
Float Through Retirement on a CDA
Contingent deferred annuities (CDAs) are income guarantees for managed accounts. Their biggest regulatory hurdle may have been cleared last February, when an NAIC committee agreed that CDAs are annuities and not financial guaranty insurance.
A Day in the Life of ‘Day One’
To show that Prudential understands retirement and empathizes with retirees, the insurer created a series of warm, image-building ads in which real-life retirees show-and-tell their own stories.(Above, Linda Guthrie.)
Featured
The View from the Variable Annuity Trenches
VA issuers are a little like homeowners in the wake of the financial crisis: some carry a lot of risk and can do nothing but wait for the market to turn around; others still have a lot of equity and can enjoy the blessing of low-rate refinancing.
The View from the Variable Annuity Trenches
VA issuers are a little like homeowners in the wake of the financial crisis: some carry a lot of risk and can do nothing but wait for the market to turn around; others still have a lot of equity and can enjoy the blessing of low-rate refinancing.
News
It’s a drag: Low rates weigh on life insurer earnings
“Operating earnings in the individual annuity segment were generally lower in 2011,” said a new report from Fitch Ratings, “as extreme equity market volatility in the second half more than offset strong results through the first half in the variable annuity line of business."
Global roundup from IPE.com: China, UK, Netherlands
China now outsources management of about $57 billion of its $136 billion Social Security fund to foreign money managers, UBS is warning UK pension funds about longevity risk, and the Dutch have just raised their official retirement age to 67, effective in 2023.
Cash balance plans, the darlings of small professional firms
“IRS regulations released in October 2010 added flexibility for plan sponsors, so we expect this growth rate to continue accelerating,” said Dan Kravitz, whose eponymous firm designs and administers cash balance retirement plans.
One in six mortgages of >50 Americans are underwater: AARP
Subprime, middle-income and minority borrowers have been hardest hit by the housing crisis. But serious delinquency rates are still higher among those under age 50.
“Quote” of the Week
“You can be young without money but you can’t be old without it. You’ve got to be old with money because to be old without it is just too awful. You’ve got to be one or the other, either young or with money. You can’t be old and without it. That’s the truth, Brick.” -- from Cat on a Hot Tin Roof by Thomas L. “Tennessee” Williams.
The Bucket
Brief or late-breaking items from Achaean Financial, NAPFA, MassMutual Retirement Services, and John Hancock Funds.
She’s Not a Captive Academic
For New School economist Teresa Ghilarducci, the 401(k) system, like the inert bird in the classic Monty Python pet shop scene, is a dead parrot. Her independence is refreshing.
