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.

Why Indexed Annuity Sales Are So Strong

Many factors are driving the increase in indexed annuity sales: More manufacturers, better products, more distributors, competitive commissions, aging boomers, and relaxed regulation. But does the bubble contain the seeds of its own deflation?

Lessons from a Living (DC) Experiment

Israel has found that even a mandatory defined contribution system can’t resolve all of the behavioral, economic, or administrative issues that prevent low-income and minority workers from saving for retirement. (Photo: Mahane Yehuda market in Jerusalem.)

What Advisors Want from Annuity Issuers

This week, RIJ received a press copy of “What Advisors Want from Annuity and Insurer Providers-2019,” a study by Practical Perspectives, a Boxford, MA-based financial services market research firm.
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.

“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.