Products October 17, 2011

The Hartford Launches 401(k) Lifetime Income Solution

October 17, 2011 (PLANSPONSOR.com) - The Hartford has launched The Hartford Lifetime Income, a patented income solution delivered through 401(k) plans to provide a guaranteed paycheck for life.
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A press release said Hartford Lifetime Income simplifies income planning for retirement savers. Retirement plan participants can purchase income shares that provide $10 of guaranteed monthly income for life. That means 50 income shares will generate $500 a month.  

The cost of each income share varies with the plan participant’s age and current interest rates, and is predicated on retirement at age 65. The amount of income from each unit can increase if the participant retires later or can decrease if the participant retires earlier. Retirement plan participants can invest in Hartford Lifetime Income through regular payroll deductions or lump-sum payments.  

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In addition, according to the announcement, the income shares are portable, which means that a plan participant can retain the shares and the guaranteed income they provide if he or she changes employers, or the plan sponsor changes providers or recordkeepers.   

Hartford Lifetime Income is a fixed deferred annuity imbedded as an investment option within 401(k) plans, which means it is not affected by volatility in the equity markets. The investment option is also included in the Fiduciary Assure program, an optional, third-party co-fiduciary service provided by Mesirow Financial at no additional cost. Guarantees are based on the claims-paying ability of Hartford Life Insurance Company.  

Hartford Lifetime Income is initially available to retirement plan sponsors newly contracted with The Hartford and their plan participants.  

“We expect Hartford Lifetime Income, with its revolutionary, simple design, will change the retirement income game,” said Patricia Harris, the actuary who designed the product for The Hartford, in the announcement. “It offers predictable income backed by a fiduciary guarantee and it’s portable, so no matter what obstacles emerge on the road to retirement, you can have confidence that Lifetime Income is guaranteed to last as long as you do.” 

Benefits October 17, 2011

Colorado PERA Pushes Back on Member Disclosure

October 17, 2011 (PLANSPONSOR.com) – The Colorado Public Employees’ Retirement Association (PERA) has filed its own claim in a lawsuit trying to force disclosure of participant information.

 

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PERA’s claim asks the Denver District Court to provide guidance on the circumstances under which PERA can lawfully disclose confidential member information to its Trustees.  The filing comes in response to a suit by Colorado State Treasurer and PERA Trustee Walker Stapleton pressing for the disclosure (see CO Treasurer to Sue for Pension Information). 

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According to a posting on its website, PERA has asks the Court to declare that release of member information to a Trustee is proper when: (1) there is evidence that there is a valid fiduciary purpose; (2) the information requested has a connection to the purpose identified; (3) the cost of production is reasonable; and (4) there are safeguards to protect the confidentiality of the information.

Additionally, PERA says it has asked the Court to determine that the Board properly concluded that the Treasurer is not entitled to information he requested regarding the top 20 percent of PERA benefit recipients. “The Treasurer, despite numerous opportunities to state a valid reason for asking for this information, has never done so. In addition, the Treasurer could not describe any reasonable connection between the information he was requesting and any valid fiduciary purpose,” according to PERA. 

According to PERA, Colorado law requires the system to maintain the confidentiality of “all information” in PERA’s member records. The PERA Board sought the advice of attorney John Nixon, a national expert on the fiduciary duties of board members, regarding the request, and Nixon advised PERA’s Board of Trustees that the disclosure of such information could violate the confidentiality protections in Colorado law.  “Nixon also advised the PERA Board that due to the Treasurer’s lack of any valid stated purpose for the request, the Board members would be potentially breaching their fiduciary duty if they were to disclose the information to the Treasurer,” according to PERA.  After carefully considering Nixon’s opinion, all Trustees except for Stapleton voted to deny the request. 

PERA’s formal response to Stapleton’s lawsuit states: “This action provides an opportunity for PERA to obtain guidance regarding circumstances under which it can lawfully disclose information regarding its members and benefit recipients to PERA Trustees.”

PERA has retained Denver attorney John V. McDermott of the law firm Brownstein, Hyatt, Farber, Schreck, LLP, to represent it in the lawsuit. McDermott stated, “The claim of PERA is a constructive attempt to establish the standards to be used in the future in the event of a request by any Trustee.”

According to a posting on PERA’s website, the system’s actuarial consultants review each member and retiree record every year and report the overall results of their analysis to the PERA Board of Trustees and to the General Assembly’s Legislative Audit Committee. “Additionally, the State Auditor’s Office hires one of the four largest accounting firms in the world to audit PERA’s financial report and operations every year”. This information is publicly available on the State Auditor’s Web site and in PERA’s Comprehensive Annual Financial Report (CAFR).

In similar cases, courts in California have decided that pension records are public information (see State Court Orders Sonoma County Pension Board to Release Records).  

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