Fixed Annuity News
The fixed annuity industry is constantly changing. From product evolution and distribution consolidation to pending regulation and legislation, NAFA works diligently to keep up with every aspect of the marketplace and provide you with its most pertinent news in a timely manner. Utilize the information below to read about recent media coverage in our Monday Media Reports, access monthly advocacy updates via The Call, visit our Press Room for the association’s most current news releases or to catch up on our Twitter feed.
Industry News
Why Annuities Belong In Clients’ Retirement Income Plans
1 APRIL – Paul R. Samuelson – Financial Advisor
“I drive a Chevy Volt, frequent public transportation and bike to work when the weather allows.
I’m conservative in my spending and investing and relatively immune to fads. I won’t be baited into paying extra fees for goods or services when I don’t think they’re worth the cost.
So, readers may find it surprising that I agree with ardent annuity advocates that guaranteed income products hold a rightful place in many clients’ retirement plans. The marketplace seems to agree: Witness the boom in annuity sales over the past two years.”
Insured Retirement Institute CEO Vows to Defend Annuity Industry
4 APRIL – Allison Bell – Thaink Advisor
“Insured Retirement Institute officials are talking about efforts to shape the U.S. Department of Labor’s definition proposal at the group’s annual conference this week in Nashville, Tennessee.
CEO Wayne Chopus told attendees that he hopes they’ll see IRI as the champion and defender of the retirement income industry, according to a summary provided by the association.”
DOL fiduciary rule proposal to restrict, ban some producer compensation
4 APRIL – John Hilton – Insurance News Net
“For an industry that has struggled mightily at times to attract producers, the changes to compensation accompanying the new Department of Labor fiduciary rule are no small concern.
Repeated studies show a very high attrition rate for insurance producers entering the business. It adds up to “a dying distribution” system, said Sheryl Moore, CEO of Moore Market Intelligence and Wink, Inc.
“I think that we’re gonna lose quite a few insurance agents if the DOL gets their way,” she said, “and that could be devastating to pre-retirees who need to hear about annuities.”
Why Are Indexed Annuity Par Rates So High?
4 APRIL – Laurence Black – Think Advisor
“The owner of a fixed index annuity (FIA) can tie its crediting rate to the performance of one or more benchmark or risk control indices.
If an FIA contract has a participation rate, or par rate, over 100%, that means the owner can get a boost to the crediting rate that’s bigger than the percentage increase in the corresponding index.
In recent years, the participation rates, or par rates, for fixed index annuities have risen substantially.”
Watch your step, advisors! It’s your job to ‘mind’ the retirement gap
4 APRIL – Gregg Greenberg – Investment News
“In the London Underground, a recorded message reminds passengers to be mindful of the space between the platform and the train. On this side of the pond, the so-called “retirement gap” occurs when the money one needs in retirement winds up being less than the amount one has saved.
In either case, the gap between where one currently stands and where one aspires to sit comfortably is fraught with danger. And in the case of retirement, it’s often up to financial advisors to provide both fair warning and guardrails to clients to protect them from peril.
“We have 25% of working Americans that don’t have access to a workplace savings program,” said David Musto, CEO of retirement record keeper Ascensus. “That’s 57 million Americans that today aren’t consistently saving at the workplace for a better retirement and financial future. So we have work to do to ensure that we get more people into the savings system and encourage more of those individuals to save more over time.”
Solving the Retirement Puzzle: Are Annuities the Missing Piece?
5 APRIL – SS&C – Think Advisor
“With 58% of retirement savers concerned about outliving their assets, advisors, and clients are giving annuities a fresh look.
Financial advisors are fielding more concerns from clients who worry about outliving their savings. A June 2023 Cerulli Associates report found that Social Security is the primary income source for 54% of those surveyed, and 58% of retirement savers – including retirees – fret that their assets will run out and leave them struggling1.”
Is The Secure Act 2.0 Really “Saving” Retirement for Americans?
6 APRIL – Sam Sturgis – Yale Journal on Regulation
“The SECURE 2.0 Act (“SECURE 2.0” or “the Act”) contains a host of recent changes intended to make sure employers, the federal government, and the retirement plan industry are helping Americans save more for retirement. Enacted on December 29, 2022, SECURE 2.0 is an extension of the Setting Every Community Up for Retirement Enhancement Act of 2019 (“SECURE Act”) and continues its mission of expanding access to, and increasing participation in, employer-offered retirement plans.”
You Can’t ‘Legislate Good Behavior’: What Advisors Really Think About The DOL Rule
5 APRIL – Ben Mattlin – Financial Advisor
“As financial professionals anxiously anticipate the Department of Labor’s new fiduciary requirements, which President Joe Biden is expected to sign this spring, their attitudes vary greatly. Some look forward to the anticipated changes, while others foresee disaster and still others are somewhat indifferent.
“I am not as concerned about it impacting our advisory business since we already act as a fiduciary to our clients,” said Amber Kendrick, vice president and retirement plan consultant at Procyon Partners in Shelton Conn. “However, I do think it may impact the retirement plan industry.”
Demographic Shifts Flooding the Index Annuities Market
8 APRIL – D. Korth – Nasdaq
“Every day, 12,000 individuals from the baby boomer generation in the US turn 65, and by 2030, all baby boomers will have reached this age milestone. This demographic shift has led to a change in investment priorities, with baby boomers now seeking more protection-oriented financial products, such as annuities. Annuities offering downside protection and guaranteed returns have gained popularity over those promising high growth potential.”
Annuities Soar as Source of Life Insurer Revenue
11 APRIL – Allison Bell – Think Advisor
“U.S. life insurers are getting a lot more of their retail product premium revenue from annuities than from life insurance these days.
Individual annuities accounted for $344 billion of life insurers’ $1.5 trillion in direct written premiums in 2023, or about 24% of the total, according to new industrywide totals from A.M. Best.
Only $168 billion of the premiums, or 11% of the total, came from individual life insurance.”
Monday Media Report
The NAFA Media Report features a summary of the previous week’s fixed annuity media coverage. NAFA welcomes your contributions and suggested additions.
The Call
The Call features timely and seasonal regulatory and legislative updates to help NAFA members stay on top of issues impacting their businesses. Both federal and state editions are distributed to keep you informed.