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By Minneapolis Star Tribune | May 9, 2007
MINNEAPOLIS -- A group of state regulators and a top industry watchdog are backing a new rule that would provide uniform protection to people who buy annuities. The NASD, a self-regulating organization that oversees broker-dealers, along with insurance commissioners from Minnesota, North Dakota and Iowa issued a joint statement yesterday calling for states to make sure that insurance companies sell only suitable annuities to their customers. Under the current system, state insurance commissioners oversee insurance agents while the NASD supervises licensed broker-dealers.
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BUSINESS
By Eileen Ambrose, The Baltimore Sun | February 6, 2012
Until recently, retirement planning focused mostly on helping workers accumulate savings. Now, the Treasury Department is tackling another aspect: making sure retirees don't run out of money. The department last week proposed two regulations to make it easier for workers to get annuities through their workplace plans. With an annuity, workers can make a lump-sum payment to an insurance company and in exchange get an income stream for life. Outliving savings is a serious risk, and a fear of many retirees.
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BUSINESS
By Lyle Denniston and Lyle Denniston,Washington Bureau of The Sun | January 19, 1995
WASHINGTON -- The Supreme Court approved broad power yesterday for the government's chief regulator of national banks to approve new lines of business for those institutions, including the sale of variable and fixed annuities.Banks have about 20 percent of the $100-billion-a-year market for annuities, a market that is growing rapidly. A lower-court decision that would have forced many banks out of that business was overturned unanimously by the new ruling.The decision, in a case involving NationsBank of North Carolina and a subsidiary, means that many state banks also may offer annuities.
NEWS
By Richard J. Magid | August 11, 2011
The next several years will see a flood tide of a new kind of retiree — the rollover retiree. Millions of baby boomers will be transitioning into retirement without the comfort of the old-fashioned monthly pension check, but rather with a lump sum rollover check from their employment 401(k) or 403(b) retirement account. Ready or not, each rollover retiree will start a new career as an investor. Most will not be ready. For the fortunate few who have been able to accumulate large retirement accounts, the transition to retiree investor is eased by the legions of financial planners, investment advisers, money managers, etc. who are ready — for a fee — to advise and shepherd these rollover retirees into the world of investing.
BUSINESS
By Eileen Ambrose | August 21, 2005
ONE OF THE BASICS of investing is to never put money in anything you don't understand. That's important to remember when it comes to equity-indexed annuities, which are touted as a way to participate in the stock market's growth without any downside risk. But anytime you invest there's risk. And there's mounting concern among regulators and others that these complex annuities are being hyped to investors without fully pointing out the risks, including the possibility of losing money. Sales have surged in recent years, from $14.4 billion in 2003 to $23.1 billion last year, according to the National Association for Variable Annuities.
BUSINESS
By Bill Atkinson and Bill Atkinson,SUN STAFF | October 12, 1996
Citizens Bancorp's earnings jumped 20 percent in the third quarter as loans grew briskly and the bank sold more services to customers, the company said yesterday.Citizens earned $11.3 million for the third quarter in 1996, or 75 cents a share, compared with $9.4 million, or 63 cents a share for the same time a year ago.Jo M. Stewart, a senior vice president with the Laurel-based banking company, said sales of annuities, home equity lines and mortgages helped boost the bottom line."We've seen pretty strong growth in the commercial portfolios and we've had some heavy promotion of our home equity line as well," Stewart said.
BUSINESS
By Jane Bryant Quinn and Jane Bryant Quinn,Washington Post Writers Group | April 6, 1998
I GOT A letter from a familiar address -- Niagara Falls, N.Y., the place where I grew up. The question it asked could have come from anywhere today. "A financial planner thinks I should buy a tax-deferred variable annuity. What do you think?"Salespeople are selling annuities to anyone who breathes. The reason is simple. They earn big commissions, in the 5 percent to 7 percent range.You don't notice this commission because it's not deducted up front. In fact, the annuity brochure may boast, "No initial sales charge."
BUSINESS
By Peter Kerr and Peter Kerr,New York Times News Service | April 22, 1992
After the failure of several major life insurers in the last year, regulators and members of Congress are seeking to restrict an increasingly widespread but little-known practice: the transfer of hundreds of thousands of annuities and life and health insurance policies from one company to another each year, leaving consumers with little or no choice about whether to switch.When it comes time to collect their money, consumers may find the company they chose has washed its hands of their business.
BUSINESS
By KATHY M. KRISTOF and KATHY M. KRISTOF,LOS ANGELES TIMES | April 26, 2006
Second-grade teacher Crystal Mendez was in the staff lunchroom at 42nd Street Elementary in Los Angeles when a broker introduced herself and started talking up a retirement plan. Mendez thought she could trust the woman because her company had been endorsed by her teachers union. She agreed to put $400 a month into a retirement account, assuming her money would be invested in stocks. Just 22, she figured she had plenty of time to ride out any dips in the market. Nearly two years later, when her boyfriend started bragging about the returns he was earning on his 401(k)
BUSINESS
By Janet Kidd Stewart and Janet Kidd Stewart,yourmoney@tribune.com | September 7, 2008
Equity-indexed annuities have drawn a lot of interest from investors - and regulators - in recent years. The products are technically considered fixed annuities, offering downside protection through a guaranteed payout, plus a bonus feature that triggers a higher rate if the stock market performs well. Sounds simple enough, but securities regulators have been cautioning investors about high fees and onerous surrender charges on these insurance products for a decade or more, and they are moving closer to stepping in and changing the way they are sold.
BUSINESS
By Janet Kidd Stewart and Janet Kidd Stewart,yourmoney@tribune.com | September 7, 2008
Equity-indexed annuities have drawn a lot of interest from investors - and regulators - in recent years. The products are technically considered fixed annuities, offering downside protection through a guaranteed payout, plus a bonus feature that triggers a higher rate if the stock market performs well. Sounds simple enough, but securities regulators have been cautioning investors about high fees and onerous surrender charges on these insurance products for a decade or more, and they are moving closer to stepping in and changing the way they are sold.
BUSINESS
By Janet Kidd Stewart | August 17, 2008
My wife and I recently retired on small government pensions and have moderate Social Security benefits from nongovernmental employment work history. We both have untapped 403(b) annuities and have heard that we should convert them to IRAs, then gradually convert the IRAs into Roth IRAs. What are the tax effects of such a conversion, and what is the optimum way for us to do this? - J.P. Because your other sources of income are fixed pensions, you are right to consider getting rid of the annuity to diversify the types of investments in your portfolio, said Mark Balasa, a financial adviser with Balasa, Dinverno & Foltz LLC in Itasca, Ill. "Unless they are in the rare 403(b)
BUSINESS
By EILEEN AMBROSE | August 12, 2008
Many people are worried about the security of their money on the heels of the third-largest U.S. bank failure last month. But Carl of Perry Hall says he is worried about something else. "What concerns me more so are funds that I have tied up in insurance company annuities," he writes in an e-mail. "These funds represent about one-third of my capital assets." Deposits at banks, of course, are insured by the Federal Deposit Insurance Corp. What protection, Carl wonders, is there for insurance companies and their customers?
BUSINESS
By Humberto Cruz and Humberto Cruz,Tribune Media Services | June 22, 2008
We have a problem. "I have an annuity purchased for me by an investment broker at my bank," a reader wrote. "I'm having difficulty understanding what this is. He has since left the bank and his successor isn't much help. The money is tied up for four years with a 9 percent early withdrawal penalty." From another reader: "My husband and I are being pressured to buy a variable annuity. I was told we'd never lose our principal, but I am really scared. We have to do this in about two weeks."
BUSINESS
By The Wall Street Journal | June 17, 2008
A shaky stock market and low rates on certificates of deposit have sent investors flocking to fixed annuities with deferred payouts. But they aren't a smart choice for many savers, particularly younger ones or those who may need ready access to funds. In this type of annuity, savers often make a one-time payment. And the issuer of the annuity, an insurer, guarantees to pay a certain interest rate for a certain period of time. Say you stuck $100,000 in a five-year deferred annuity at a 4.2 percent rate.
BUSINESS
By Kara McGuire and Kara McGuire,Minneapolis Star Tribune | June 1, 2008
MINNEAPOLIS - It was the height of the dot-com boom, when workers were retiring early on their double-digit technology stock winnings and day trading was all the rage. There stood Kelli Hueler, before an audience of financial professionals, explaining the urgent need for affordable annuities so that future retirees won't run out of money. The comment cards she collected afterward confirmed what she knew all along: "We were painfully ahead of our time," she said, chuckling as she recalled the day that dull, dependable, unfashionable annuities became her passion.
NEWS
By Thomas W. Waldron and Jean Thompson and Thomas W. Waldron and Jean Thompson,SUN STAFF | May 8, 1996
Challengers battling the leadership of the Baltimore Teachers Union yesterday chided the group's two presidents for a "lavish" benefits package that includes $200,000 annuity premiums being paid by the union even as it is running a deficit.Marcia Brown, who is running in union elections next week against longtime BTU President Irene B. Dandridge, said that the annuities -- coupled with compensation that tops $99,000 for each woman -- are inappropriate benefits for a union representing modestly paid teachers and other school employees.
BUSINESS
By Kara McGuire and Kara McGuire,Minneapolis Star Tribune | June 1, 2008
MINNEAPOLIS - It was the height of the dot-com boom, when workers were retiring early on their double-digit technology stock winnings and day trading was all the rage. There stood Kelli Hueler, before an audience of financial professionals, explaining the urgent need for affordable annuities so that future retirees won't run out of money. The comment cards she collected afterward confirmed what she knew all along: "We were painfully ahead of our time," she said, chuckling as she recalled the day that dull, dependable, unfashionable annuities became her passion.
BUSINESS
By Humberto Cruz and Humberto Cruz,TRIBUNE MEDIA SERVICES | September 23, 2007
Consider this column a dessert with additional thoughts on free-lunch "investment seminars." I use the term in quotes for presentations that include a free meal to entice potential investors, usually senior citizens, to sit through thinly disguised sales pitches. Among products often promoted are indexed annuities, linked to the Standard & Poor's 500 or another index, that promise stock market-like gains without risk of loss. Half-truths, distortions and high-pressure tactics are common enough that investment seminars this year made the annual list of Top 10 traps compiled by state securities regulators.
BUSINESS
By Eileen Ambrose and Eileen Ambrose,Sun Columnist | July 15, 2007
Retirement savings plans at schools, hospitals and other nonprofits are about to undergo their biggest overhaul since Lyndon Johnson was president. It's about time. For far too long, many 403(b)s have operated with little or no employer oversight. Workers can be confronted with hundreds of investment options, a daunting prospect for even sophisticated investors. And it isn't unusual for many of their choices to be high-fee mutual funds and annuities. The overhaul is coming from the Internal Revenue Service, which first proposed changes more than two years ago. The IRS says it will soon release final regulations, which could take effect as early as January.
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