The controversy over retirement savings product sales standards may affect agents’ and advisors’ ability to save for their own retirement.
At least one insurer, Lincoln Financial, has excluded agent compensation related to some retirement savings products from agents’ own retirement benefits calculations.
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Lincoln Financial is formally known as Lincoln National Corp.
Lincoln Financial’s retirement plan move affects at least two plans: the LNL Agents’ 401(k) Savings Plan and the Lincoln National Corp. Deferred Compensation Plan for Agents and Brokers, according to two prospectus change documents filed Monday with the U.S. Securities and Exchange Commission.
The company did not say in the filings why it made the retirement plan changes, but the changes appear to affect only the kinds of retirement saving products affected by the U.S. Department of Labor’s fiduciary rule. The DOL fiduciary rule took effect June 9. The agent and broker retirement plan changes apply only to earnings related to annuity and retirement products transactions taking place after June 9.
A Lincoln Financial representative confirmed in a separate email that the company made the changes in connection with DOL fiduciary rule implementation.
For purposes of calculating the plan’ benefits, some producer earnings related to Lincoln are either “pensionable” or deferrable. Some are not.
Effective June 9, the agents’ 401(k) plan will exclude any commissions or fees paid during the plan year related to “qualified” indexed annuities or “qualified” variable annuities. A qualified annuity is an annuity used in a retirement savings arrangements that qualifies for favorable treatment under federal income tax rules.
The 401(k) plan will also exclude commissions or fees related to qualified retirement transactions placed after June 9, and some transition payments made by Lincoln’s retirement plan services business unit after that date.
Lincoln filed a separate prospectus change for the deferred comp plan. That change excludes qualified indexed annuity payments, qualified variable annuity payments and retirement plan services unit transition payments made after June 9 from the plan’s definition of “benefit eligible agent commissions.”
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