Holistic Retirement Planning on Horizon
"There has never been a greater demographic need for lifetime income strategies," IRI President and CEO
The report also discussed the impact of rising interest rates, as the retirement income industry heads into 2017. While still historically low, if rates can continue to increase at a gradual pace, the report suggests the market may respond by offering higher crediting rates on fixed annuities and more generous payouts on both fixed and variable products offering lifetime income. Should rates normalize, it will take some time to have an effect, so rising rates should be viewed as having a late-2017 impact on product design and/or sales.
On the public policy front, the IRI report focused on the
Additional key findings from the report:
* Promoting retirement savings and lifetime income: Public policy can greatly influence retirement savings and increase access to lifetime income strategies through workplace plans. IRI specifically identified the Retirement Savings and Enhancement Act, which would "provide clear rules to plan sponsors for including lifetime income products in workplace plans," as legislation advancing these objectives. The legislation was unanimously approved by the
* Product innovation: The retirement income industry continues to innovate, developing products to respond to the interest rate environment and to the changing regulatory landscape. Regarding the former, insurers expanded the use of managed volatility funds when offering lifetime income benefits with variable annuities. They also expanded the use of custom indexes with volatility controlled overlays in fixed indexed annuities. In response to the regulatory landscape, the report finds that many companies began designing or expanded their lineup of fee-based products.
* Financial stability: The report finds that the life and annuities industry is financially stable headed into 2017. The credit rating outlook is stable, reflecting strong balance sheet fundamentals and liquidity, as well as disciplined asset-liability matching and operating performance.
* Economic engine: According to the IRI report, providers of retirement income products and services employ tens of thousands of professionals across
Click HERE (http://www.myirionline.org/docs/default-source/research/iri-state-of-the-insured-retirement-industry---2016-review-and-2017-outlook.pdf?sfvrsn=2) to access the full report.
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