Plan Distributed Annuities

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Traditional annuities are inflexible. Period. You get the monthly benefit you pay for. They provide a very valuable benefit which should be part of anyone’s retirement planning, but this inflexibility can be scary, as it takes away from the participant the ability to address unexpected contingencies. This fear comes from the second point: the funds used to buy the traditional annuity are gone for good. Other than payments made under a survivor annuity, the traditional annuity doesn’t give the participant any access to funds to pay for contingencies, nor does it typically pay a death benefit. So what’s a fiduciary to do?
Continue Reading Addressing Fiduciary Concerns in the Purchase of 401(k) Distributed Annuities: Dealing With The Five “I’s”- Part 2, Inflexibility and Inaccessability

The first element in a fiduciary review is to get at least a layman’s grasp on the nature of insurance and insurance regulation. Pooling risks with others is an uncomfortable concept that is foreign to fiduciary with a defined contribution mindset Because of pooling and this “30 year risk,” insurance is regulated in ways of no other industry…
Continue Reading Addressing Fiduciary Concerns in the Purchase of 401(k) Distributed Annuities: Dealing With The Five “I’s”- Part 1, Irrevocability

Our blog of May 26 on "Distributed Custodial Accounts" generated a number of comments, which require a bit of a "follow-on."  Ellie Lowder, one of the grand dames  of the 403(b) world, agreed with my assessment.  She mentioned  that she had discussions with the IRS on this point. Staff  just couldn’t see how distributions of…

It is back to the future, in an odd sort of way. There is growing trade press coverage on the interests of 401(k) plans and plan participants on turning a portion of participants’ account balances into a "defined benefit-like" guaranteed income stream. Follow, for example, this link to Plan Advisor.com.

There are really two ways…