"Retirement Income University," introduced in January, is a great idea! Offering Research readers a steady stream of information and context can certainly help them navigate through the extensive -- and still growing -- menu of income vehicles and investments.
I was gratified to learn of Dr. Moshe Milevsky's refined opinion of variable annuities and the role they can potentially play in helping boomers effectively transition from accumulation to the critically important retirement income phase. He's certainly right in citing how variable annuities have evolved over the past several years and now provide flexibility in terms of features and options. When it comes to retirement income plans, one size does not fit all, and never has.
Dr. Milevsky's concern about whether the underwriting companies that issue variable annuity contracts can meet long-term income guarantees is certain to be debated within the variable annuity and insurance industry, as well as among other financial columnists and pundits. I'll leave that debate to them.
But one thing is certain, financial advisors do and should pay attention to annuity companies' financial strength and risk management disciplines -- it's a core consideration in ensuring an annuity contract meets clients' needs and protects client savings. A recent ING USA Annuity and Life Insurance Company-commissioned survey of financial institution product managers indicates that the "financial strength" of the annuity company is the most important criteria for determining which providers are allowed shelf space at their institution.
Our disciplined approach to risk management enables us to offer competitive guaranteed benefits. That approach includes prudent product designs that help protect clients as well as the ING family of companies, rigorous reserves and capitalization consistent with all regulatory requirements, and finally, market risk hedging using capital market financial instruments.
Financial strength matters -- and it should.
Harry N. Stout
President, Retail Annuity Business
ING U.S. Financial Services