With annuity sales rising, Congress provides a ‘safe harbor’ in 401(k)s
December 23, 2019 by Tobia Salinger
Congress has passed a bill expected to lead to rosier annuity sales in the future — just as structured products are picking up on the macroeconomic slack dragging down fixed products.
Issuers and brokerages are cheering the inclusion of a bipartisan federal retirement bill called the Secure Act in a giant budgetary measure. The legislation aims to expand access to 401(k) plans through incentives for employers, but it includes a revenue provision that has raised concerns among advisors. President Trump is expected to sign the bill into law by the end of the week.
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In the different interest-rate environment, a slowdown among fixed products is expected. But FIAs aren’t exactly slumping, according to Sheryl Moore, CEO of insurance research firm Wink. She points out that bullish structured products show similarities to FIAs.
“This was the second strongest quarter ever for indexed annuity sales, despite continued low interest rates and pricing challenges as a result of the market,” Moore said in a statement, adding a guarantee that 2019 will end up being another record year for FIAs.
“Structured annuity sales continue to set records,” Moore continued. “It is no wonder that we continued to see companies enter this line of business each quarter when you consider that this product mirrors indexed annuities when evaluated at the same point in the product life cycle.”