Retirement News

The House Education and Labor Committee approved in June the 401(k) Fair Disclosure and Pension Security Act of 2009 (HR 2989); two other bills, the Conflicted Investment Advice Prohibition Act of 2009 (HR 1988) and the 401(k) Fair Disclosure for Retirement Security Act of 2009 (HR 1984), were combined into HR 2989. While many in the retirement industry applaud HR 2989′s defined benefit funding relief provisions, groups like the American Benefits Council (ABC) say the investment advice portion of the legislation does not protect the many non-conflicted advice arrangements approved by the Department of Labor (DOL) prior to the enactment of the Pension Protection Act of 2006, chief among them being those established under the Sun America advisory opinion. Jason Hammersla, an American Benefits Council spokesman, says ABC is “hopeful that protections for those arrangements can still be added in.” HR 2989 has been referred to the House Ways and Means Committee, but no timing for consideration of the bill has been announced. ABC President Joe Klein stated in a release that ABC also has some concerns about the underlying 401(k) fee disclosure bill, which he said “continues to expose employers to unacceptable levels of fiduciary liability.”

The recently released first national study of long-term care insurance buyers, conducted by the American Association for Long-Term Care Insurance (AALTCI), found that nearly half of individuals purchasing asset-based long-term care insurance in 2008 were under age 65. Two-thirds (66%) of purchasers were women, the study found, and the average single premium paid was just shy of $71,000 ($70,975). The study, which examined 2008 sales data for more than 5,000 new policies, found that asset-based long-term care is growing in popularity because if offers the dual benefit of access to LTC benefits as well as life insurance protection. Jesse Slome, AALTCI’s executive director, predicts “the market for asset-based long-term care protection will increase in the years ahead,” as “leading insurers such as Genworth Financial and Lincoln Financial Distributors are focused on the growth of this market and policy sales.” The average single premium paid for an asset-based LTC policy in 2008 was $70,975, according to the Association study. This represented a 4% increase compared to 2007 when the average premium was $68,300. Just under half of all policies (49.7%) had a base face amount of between $100,000 and $200,000. Some 30% had a face amount of life insurance protection of between $50,000 and $100,000