In Finland: Saunas are Hot, Retirement is Cool

Finnish people love their saunas and their nation's retirement system, which features a basic tax-funded pension, a compulsory collectively-managed DC plan for private-sector workers, and a government pension for public employees.

Examining the Indices in Index-Linked Annuities

A mountain biker needs 18 or 21 gears to smooth a path over rocks and through arroyos. Index-linked annuities now collectively offer some 140 index choices. Hybrid indices can theoretically smooth an investor’s path through rocky markets--but they're complicated.

The Point of Indexing (in Annuities)

Every June, RIJ focuses on indexed annuities. Last year, we studied options in indexed annuities. This year we consider the indexes themselves, especially 'hybrid' and 'volatility-controlled' indexes. Bryan Anderson, Don Dady and David Lau weighed in.

The Irony of Inflation Forecasting (Research Roundup)

In this month's roundup, we learn that CEOs pay little attention to inflation. We also find out why retirees keep saving, why "centaurs" pick stocks so well, which financial biases keep people poor, and how working longer affects male mortality.

Driven by VA de-risking, managed-vol funds grow

Assets in funds in this category reached $200.1 billion by mid-2013 after rising to $153.9 billion at year-end 2012 from $30.9 billion at year-end 2006, an annualized growth rate of 31%. About 64% of the assets, or $127.9 billion as of mid-year 2013, were in variable annuity separate accounts and the rest in mutual funds.

A Second Look at the ‘Floor-Leverage Model’

Two weeks ago we reported on new research by Jason Scott and John Watson of Financial Engines about a retirement income strategy that combines 85% safe assets with a 15% allocation to a triple-leveraged, daily-balanced ETF. One reader contested its value, and one of the authors has replied.

MetLife and ING benefit from Romanian pension growth

Dutch insurance giant ING, with the biggest Romanian DC fund by assets and membership, recorded the highest profit so far this year, of RON146.7m (€33.1m). As of the end of June, total profits in the second pillar grew 43% y-o-y to RON440.4m (€99.3m).

The Bucket

Brief or late-breaking items from Bankers Life and Casualty Company, New York Life, The American College, Vanguard, Mass Mutual, Jackson National Life, Jefferson National and Cerulli Associates.

Quote of the Week

"In an economic system in which a sovereign government operates through its own monetary system, spending (or lending) must occur before taxing. In addition, taxes are not a funding source in that logic. They are part of the destruction of government currency, i.e. they return currency to the issuing government"--Eric Tymoigne and L. Randall Wray, "Modern Monetary Theory 101: A Reply to Critics," p.5. Levy Economics Institute, November 2013.