Federal Executive Branch nominees and officeholders tend to fill their Form 278e public financial disclosure reports with lists of bank accounts, stocks, mutual funds and even bitcoin wallets, but some of the filers do list annuities and cash-value life insurance.
Commerce Secretary Howard Lutnick recently reported having an annuity arrangement tied to a trust. The annuity has a value over $50 million and generates $5.1 million in income.
Former President Joe Biden and his wife, Jill, reported on their 278e form for 2024 that they owned a variable annuity from Security Benefit and a whole life insurance policy from MassMutual. The nine subaccounts in the annuity contract had a value of $135,000 to $500,000.
Elaine Chao, who was the Transportation secretary during President Donald Trump's first term and is married to Sen. Mitch McConnell, R-Ky., reported on her 278e form for 2020 that she had a tax-deferred annuity from Mutual of Omaha. The annuity held a capital growth subaccount with a value of $100,001 to $250,000.
Richard Clarida, the former vice chairman of the U.S. Federal Reserve Board, who has roots at companies like Credit Suisse, Grossman Asset Management and PIMCO, reported on his 278e form for 2021 that he had several life and annuity arrangements, including a Vanguard Dividend Appreciation Index annuity with a value of $1,001 to $15,000; three Lombard Private placement variable annuities that each contained money market accounts worth $1 million to $5 million; and a Northwestern Mutual whole life policy with a value of $500,001 to $1 million.
What it means: Financial and legal professionals have to help some high-profile clients describe their life and annuity holdings on their 278e forms.
The art of describing an annuity on the 278e forms is like a distant cousin of the art of reporting annuity distributions via Internal Revenue Service Form 1099-R.
The agency: The U.S. Office of Government Ethics collects the disclosure reports and makes them available through a filing access page.
Usage restrictions: Federal law puts limits on what the public is allowed to do with the disclosures.
Reporters can use the disclosures to write articles, according to a list of OGE answers to frequently asked questions.
Reporters and members of Congress often use the filings to analyze nominees' or officials' finances, to understand what kinds of financial concerns and conflicts of interest the filers might have.
Financial professionals are not supposed to use the records for any unlawful purpose; for any commercial purpose other than creating news articles; for determining credit ratings; or for the "solicitation of money for any political, charitable, or other purpose."
Reporting rules: OGE includes the rules for reporting on annuities in 278e filings in an extensive reporting guide. OGE has stopped updating the PDF version, but the most recent PDF version available is 140 pages long.
The guide includes separate entries for variable, fixed and indexed annuity contracts; variable, term, whole and universal life insurance policies; and health savings accounts.
For a fixed annuity, for example, the guide states that nominees or officials subject to the filing requirements should "report a fixed annuity if the value of the annuity was more than $1,000 at the start of the reporting period or if more than $200 in income was received during the reporting period."
A filer is supposed to provide the exact amount of income over $200 received during the reporting period, or else select the category for "None (or less than $201)."
For an indexed annuity, the filer is supposed to specify the name of the index to which the annuity is linked.
For a variable annuity, the filer should "provide the name of each underlying asset within the annuity that individually was worth more than $1,000 at the end of the reporting period."
Howard Lutnick. Photo: Molly Riley/White House
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