Interesting. Search Bloomberg for the news on this topic.
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Here come more RIF's. The working employees will probably lose more benefits due to this while Management and Senior Management continue to get raises, STI, LTI, and stock. I'm sure the board members will continue to approve the raises for all Senior Management. What a Zoo
the scorpion fable ...they can’t help it - it’s in their nature
GIven the poisonous culture at AIG, I wouldn't trust them with anything. No wonder AIG hides their name behind other brands.
Kaplan Fox & Kilsheimer LLP Investigating Reports Of AIG Misleading Teachers Regarding Retirement Plans
8:58 pm ET October 29, 2019 (PR Newswire) Print
Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) is investigating reports that the Securities and Exchange Commission (SEC) is probing sales and disclosure practices of Valic, a unit of American International Group, Inc. (NYSE: AIG) that reportedly handles retirement plans for school districts and universities.
According to The Wall Street Journal, "the inquiry centers on whether incentives in Valic's compensation structure rewarded representatives for selling higher-cost products to retirement plan participants and whether Valic materials and representatives properly disclose the payments its representatives receive on certain product sales, the people familiar with the matter said." Further, according to The Wall Street Journal, "[t]he SEC is also looking at Valic's arrangements with school districts, in which it provides money to cover certain school expenses while also offering investment advice and products to school employees. . . ." Reportedly, in recent weeks, a number of high-level Valic executives have been placed on administrative leave.
If you are a teacher, or other school employee who may have inves
Gee, I wonder how Brian and his team will spin this on the analysts call on Friday after third quarter earnings come out. And will Brian address this during his town hall on Friday and even if he does, will it be more smoke and mirrors?
Trouble headed our way. I see more RIF's on the horizon
The annuities business, which has been struggling to polish its image in recent years, is getting an unwanted spotlight for questionable sales practices by a major provider of annuities to teachers.
The Securities and Exchange Commission has opened an investigation into Valic, a subsidiary of the insurance behemoth AIG, to determine if agents were properly disclosing costs and fee structures, and whether they were given financial incentives to sell annuities over lower-cost mutual funds, according to a Wall Street Journal report. AIG shares fell as much as 1.5%, but recovered somewhat to finish the day at $52.10, down 0.9%.
The industry has been dogged for decades by sharp criticism of aggressive sales practices that can result in investors buying and getting locked into expensive, complex products that they don't understand or need.
Lately, the spotlight has been intensifying on practices in the 403(b) market, which are qualified retirement plans for teachers. In late 2017, the New York Attorney General's office subpoenaed records from TIAA, a giant in the teacher annuity market, to follow up on complaints about its sales practices. Now, the probe into Valic may be a sign that regulators' patience is thinning, says Tony Isola, an advisor at Ritholtz Wealth Management.
"I think, quite frankly, there are going to be a lot more investigations to come," says Isola, who specialized in working with teachers on retirement planning. "The problem is, there's no transparency in the way salespeople are paid. It's really easy for companies to hide stuff."
While the broad annuity market has a history of consumer-unfriendly sales practices, potential problems are heightened in the 403(b) market because the plans aren't covered by the Employee Retirement Income Security Act of 1974. The federal law provides some protection and standards for disclosure and transparency for retirement savers.
Qualified plans at colleges and universities are covered under ERISA, as are 401(k) plans, allowing savers to bring about class-action law suits against plan providers. But K-12 schools aren't on the hook legally for problems in 403(b) plans, resulting often in a poor vetting and scrutiny of plans and leaving investors to fend for themselves.
Meanwhile, the qualified plan market has become increasingly important to annuity companies struggling with lackluster sales over the past decade or more. While in 2003 qualified plans accounted for just less than half of the industry's total $210.3 billion in sales, last year 60% of the total $221.2 billion in sales were in qualified plans, according to the Insured Retirement Institute.
Isola and many other advisors argue that annuities are rarely a wise choice for teachers in their 403(b) plans. Annuities are tax-deferred products. But 403(b) plans already allow investment to grow on a tax deferred basis. "So what's the point? It would be like putting a municipal bond in your 401(k). Why would you do that?" Isola asks, referring to a tax-free municipal bond
Isola adds that he is fighting against tradition when counseling teachers to avoid buying annuities in their retirement plans. These retirement plans were originally created in 1958 and were vehicles specifically for annuities. In the early 1970s, rules changed to permit mutual funds within these plans, but the insurance industry has held a firm foot in the door of the nation's schools.
Both the SEC and AIG decline to comment.
No way .
The SEC is investigating Valic, a unit of AIG that specializes in retirement plans, the Wall Street Journal reported on Tuesday.
The inquiry revolves around whether Valic representatives were transparent about how much compensation they received when clients chose higher-cost products, and if Valic’s pay structure favored employees that recommended the high-cost products.
Shares of AIG fell 1% on the news.