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.
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.'
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.
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.
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.
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.
“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.
“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.’”
“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.
Brief or late-breaking items from Financial Engines, Prudential, Guardian Insurance and BNY Mellon.