 Annuities
Proposed Legislation Should Boost Retirement Annuity Sales
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A proposed Senate bill is aimed at making consumers
aware of how their lump sum retirement account balances translate into
income, and may lead to greater consumer interest in rolling 401(k)
plans into retirement annuities. The legislation, Senate bill 2832,
introduced on Dec. 3, 2009, would amend the Employee Retirement Income
Security Act of 1974 to focus greater awareness on lifetime income
retirement planning. Under the bill, sponsors of 401 (k) plans and
other private defined contribution plans would be required to show
annually, on one pension benefit statement, how the value of retirement
accounts translates into guaranteed monthly payments. The bill,
introduced on Dec. 3, would require calculation of payments, based on
such factors as age at retirement. Currently, most private retirement
plans only provide participants with lump-sum values. The bill is being
discussed in the Senate Committee on Health, Education, Labor and
Pensions, but currently there is no companion bill in the House. Sharepoint Link
John Hancock, Manulife Promote, Shuffle Leaders
- John
Hancock Financial and its parent, Manulife Financial, have reshuffled
some of their leadership positions. Mike Treske was promoted to serve
as head of annuity distribution for John Hancock Financial and
President of John Hancock Wood Logan. He succeeds Robert Cassato, who
was promoted to the newly created role of Senior Advisor on global
strategy to John DesPrez, the Chief Operating Officer of Manulife. Doug
Wood, the previous Chairman of annuity distribution, has become
Chairman emeritus of annuity distribution.
Sharepoint Link
Jackson Promotes Two Executives
- Jackson National Life Insurance has
promoted Mark Nerud and Susan Rhee to serve in senior executive-level
positions. Nerud was promoted to serve as President and CEO of Jackson
National Asset Management, a subsidiary of Jackson National Life
Insurance, and Jackson Fund Services, a sister company of Jackson
National Asset Management. Susan Rhee was promoted to serve as senior
VP and general counsel of Jackson National Asset Management and Jackson
Fund Services.
Sharepoint Link
The Soleares Report
- This week's Soleares report focuses on the expected
4Q09 Variable Annuity sales results. In the past, VA sales tended to
move with major market indices, but in 2009 that was not the case.
Morningstar reports industry deposits in 2009, year-to-date through the
third quarter, were down about 23% from the same period the year
before. For Q3 alone, deposits dropped by 2% sequentially, this
happening during a time when market indices were appreciating the
S&P 500 and Dow Jones by about 15% each. Suspicions are that the
fourth quarter reflects a similar pattern. For that period the S&P
was up by 5.5%, the Dow by 7.37% and Nasdaq by 6.91% sequentially
(performance cooled off in December). And preliminary VA sales figures
from Morningstar, for October and November, show a cumulative decline
compared to the quarter before. Sharepoint Link
Analyst Sees ETFs as Perfect Fit for Annuities
- ETFs look like the ideal vehicle for creating
low-cost variable annuities, according to Morningstar's Scott Burns,
director of ETF analysis. VA providers could finally escape the costly
front-end loads and high-end fees that their products are notorious
for, while adding ETFs' tax advantages, Burns writes in a
Morningstar.com commentary. Other providers would be forced to adjust
their pricing and investment options in response, he says. The industry
is slowly waking up to this possibility, Burns says. He points to the
partnership of SPDR Group and MetLife, which launched a pair of ETF
portfolios in MetLife's VA lineup about a year ago. VAs from Vanguard
and Fidelity based on index funds serve the same need, and they have
proven popular sellers, Burns notes. Sharepoint Link
MFS Lands Spot on Edward Jones Platform
- MFS has landed a place on Edward Jones's preferred
fund family list, making it the eighth fund complex on the list and the
first added by the firm since 2006. This deal gives MFS access to
roughly 12,500 Edward Jones financial advisors at a time when the
independent broker-dealer has announced plans to aggressively expand
its number of branch offices. Already, Edward Jones has 10,500 branches
in the United States, and it has said it is looking to add as many as
1,000 more in certain regions, such as Southern California. In order to
accommodate the anticipated bump in business, MFS plans to hire 12 new
wholesalers who will be dedicated to Ed Jones business. Sharepoint Link
TIAA-CREF Champions Annuities in 401(K)s
- Defying industry orthodoxy, TIAA-Cref is
pushing for a greater role for annuities in defined contribution plans.
Chief Roger Ferguson says in a Reuters interview that he feels
companies should be required to offer an annuity option in the plans to
help participants balance out stock funds' investment risks. The
recession has underscored the vulnerability of plan assets, and
annuities would help in budgeting assets through retirement, he says.
The idea is gaining momentum among regulators and lawmakers. The Labor
Department revealed
last month that it is studying whether annuities and similar products should be added to the retirement mix. Sharepoint Link
Integrity Life Launches New SPIA
- Integrity Life launched a revamped SPIA
product at the beginning of the year. Known as IncomeSource, the new
SPIA adds four new features to their existing product. Commutability
and Cash Refund options have been added, and the Increasing Payments
feature has been extended to allow 4% and 5% annual increases. They
have also added a 'Temporary Life' feature, which maximizes payouts
over a specific period of time. Sharepoint Link
Presidential Life Launches New SPDA
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On their monthly annuity industry conference call, LIMRA indicated that
Presidential Life has designed a new deferred income annuity called the
Sentinel. It has up to a 30 year deferral period and is targeting
younger individuals aged 30-60. No marketing materials are currently
available, but more information will be published in a future edition
of WIFR.
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