The ‘Floor-Leverage’ Model
An easy income recipe from Financial Engines: Put 15% of your savings in a triple- leveraged stock ETF and the rest in something safe, like a TIPS ladder.
A Roundup of RIIA’s Meeting in Texas
Michael Finke of Texas Tech, John Salter of Evensky & Katz Wealth Management, Larry Cohen of Strategic Business Insights and others presented at the Retirement Income Industry Association's annual meeting, held this year at Dimensional Fund Advisors headquarters in Austin, Texas. (Above, the DFA lobby).
A Conspiracy against Public Pensions?
Either paranoid or perceptive, public pension administrators say they are being sandbagged by a pervasive, persistent stealth effort to convert their DB plans to DC and gain greater control over their collectively immense assets. Maybe they're just observing business as usual.
Goldman Touches the FIA Market
A Bermuda domicile is just one of Global Atlantic Financial Group's competitive edges. Last week, the former Goldman Sachs Reinsurance Group added Forethought, which markets variable, fixed and fixed indexed annuities, to its stable of insurance businesses, which includes Commonwealth Annuity.
Featured
The Four-Sided Chess Game
Today, insurers are invoking fiduciary duty to justify the offering of lifetime income products in 401(k) plans. If the fiduciary standard were applied to the management of money in rollover IRAs, they might use it to persuade advisers to put part of their clients’ savings in annuities.
Dept. of ‘Say It Ain’t So’
Forbes reporter Ted Siedle alleges that asset managers are using the financial crisis to gain greater control over the billions in troubled public pensions—in this case, Rhode Island’s.
News
Jackson National to block 1035 transfers to VAs with optional guarantees
“The company is approaching the upper range for calendar year 2013 for total premium from variable annuities (VAs) that offer optional guaranteed benefits,” said a Jackson National release.
As DB wanes in the UK, Brits continue to mull retirement reform
“We do not want to set down a law that says ‘there are three ways you can do pension, and here’s what they are,’” said Steve Webb, Britain's pensions minister, “but to say ‘here’s a set of models, you can choose.’”
Quote of the Week
“The story of book yields on investable assets, as with invested assets, has been one of decline. Gross book yields for the life insurance industry decreased 18 bps in 2012 to reach a low of 5.24% of average investable assets. This is not as large as the 38 bps decrease seen between 2008 and 2009, but the pull of decreasing interest rates has obviously overpowered moves that insurers made to increase yield in the post-crisis period.”-- from Conning's 'Life Insurance Investments' study, October 2013.
The Bucket
Brief or late-breaking items from Financial Engines, Prudential, Guardian Insurance and BNY Mellon.
