Thursday, January 21, 2010


Safer plan for pensions?

The Treasury and Labor Departments are asking for public comment on the idea of encouraging annuities, plain-vanilla investments that pay out a steady stream of pension checks. Unlike 401(k) or IRA accounts loaded with more volatile stocks and mutual funds, the homely annuity is designed to provide sleep-at-night security.

But they aren't perfect. Annuities often come with high sales fees and expenses, according to administrators of mutual funds, which see annuity-peddling insurance companies ready to steal their business. Also, if the annuity plan gets rolling, one of the big winners could be AIG, the bailed-out insurer that's received $182 billion in aid. Why should the firm get any more help? There are also blogosphere fears that the White House plan could lead to a requirement that retirees taking this option buy Treasury bills to ease deficit bills. So far, at least, that is not the table...

SF Gate: Safer plan for pensions?

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