Legislation

The status of grantor retained annuity trusts ("GRAT") is uncertain as a result of a bill that was recently passed by the House of Representatives. According to Investment News, "the Small Business and Infrastructure Jobs Tax Act of 2010 would impose a 10 year minimum for estate planning vehicles and would bar "zeroed-out" GRATS." Grantor retained annuity trusts are very efficient estate planning tools. A person using a GRAT would first place some assets in a trust. That person then takes back...

While an initial step, Senate bill 2832 could set the course for significant changes in the retirement income industry. The bill would amend the Employee Retirement Income Security Act (ERISA) which governs defined contribution plans such as the 401k . Plan sponsors would be required to provide plan participants with an annual statement that shows what the value of their retirement account would be in terms of guaranteed monthly payments--in other words, annuity payments . The bill is intended...

Members of Congress and officials from the Departments of Treasury and Labor are working on options that would provide sources of guaranteed lifetime income to participants in 401k and other pension plans. At a high level, it is clear that the Obama Administration wants to create structures and incentives for: Increasing retirement savings. Providing people with the ability to turn those accumulated savings into streams of income that last through retirement. A trial program that would involve...

The Senate introduced a piece of legislation that would require retirement plan sponsors to provide plan participants with estimates of how much income their accounts will generate in retirement. The majority of Americans approach retirement without a basic financial plan and with resources that are not sufficient for support of pre-retirement spending and lifestyles. The Lifetime Income Disclosure Act would provide Americans with a clear picture of the income-producing potential of their...

The House Financial Services Committee passed the Investor Protection Act of 2009. This legislation would have a meaningful impact on the sales of annuities and mutual funds as the current suitability standard would be replaced by a much higher fiduciary standard. The net effect would be a big win for financial services consumers. Currently, suitability standards require that financial advisors determine whether a product is appropriate for a given client profile, with risk tolerance as one of...