ACLI Says SECs Mutual Fund Proposals Disadvantage VAs
A Securities and Exchange Commission proposal aimed at combatting mutual fund trading abuses would disadvantage pension funds and variable annuities, say life insurers and business groups.
“We will encourage the SEC to examine the structural differences between mutual funds, variable annuities and pensions funds,” says Carl Wilkerson, chief counsel for securities and litigation with the American Council of Life Insurers, Washington.
“Life insurers do not want solutions to market conduct abuses that originated in the mutual fund industry to unfairly impair millions of people saving for retirement in variable annuities, 401(k)s and other pension plans,” Wilkerson says.
James A. Klein, president of the American Benefits Council, Washington, an employers group adds, “At a time when Americans are trying to save for their retirements, we are disturbed that the SEC has proposed a rule that disadvantages retirement plan investors.”
In an attempt to respond to recent revelations of mutual fund market abuse, the SEC on Dec. 3 proposed a rule that would establish a 4 p.m. Eastern time deadline for mutual fund trades.
In addition, the SEC proposes mandatory mutual fund redemption fees as a means to combat market timing issues.
Wilkerson says both these issues would unfairly affect pensions and VAs.
ACLI does not support illegal trading after 4 p.m., he says, but in order to meet that deadline, insurers and pension funds would have to have the orders by perhaps 1:30 p.m.