Products May 3, 2010

Guggenheim Introduces Three Mutual Funds

Guggenheim Partners has unveiled three Transparent Value mutual funds.
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The company said the funds are based upon the Dow Jones RBP Family of Directional Indexes, and the components of each index are determined using a methodology called Required Business Performance (RBP).

Developed by Transparent Value, RBP measures the company business performance that is implied in the price of a stock. Once the RBP has been calculated, a probability is assigned as to the likelihood that the management of a given company can deliver that RBP. The funds use a management strategy designed to track the total return performance of their respective Dow Jones Index, according to the firm.

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Transparent Value’s initial three funds are:

  • Transparent Value Dow Jones RBP U.S. Large-Cap Aggressive Index Fund,
  • Transparent Value Dow Jones RBP U.S. Large-Cap Defensive Index Fund, and 
  • Transparent Value Dow Jones RBP U.S. Large-Cap Market Index Fund.
Compliance May 3, 2010

ERIC Pushes for Annuity Safe Harbor

The ERISA Industry Committee (ERIC) urged the U.S. Department of Labor (DoL) against requiring sponsors to feature annuities as distribution options and toward providing a genuine safe harbor for the selection of an annuity provider.
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ERIC wrote a letter in response to the DoL and Treasury Department’s joint request for public comment about whether it should integrate annuities into the retirement plan legal and regulatory framework (see “DoL Calls for Public Comment about Annuities”).

“A mandate . . . in any fashion would subject plan fiduciaries to potential liabilities, and plans to great expense, for very little or no gain,” ERIC President Mark Ugoretz wrote in the letter. “Plans would incur substantial costs in evaluating and selecting lifetime income arrangement (LIA) providers, and in establishing and maintaining the disclosure, communications, processing, and recordkeeping systems that an LIA would require, in return for no additional benefit for the overwhelming majority of plan participants.”

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ERIC said the interests of DC plan participants as a whole group will be best served by educating both employers and participants regarding LIAs rather than by imposing an unwelcome mandate on all DC plans. “By educating employers and DC plan participants, the agencies can have a positive influence on plan design, participant perceptions, and ultimately participant behavior, without imposing unnecessary and unproductive costs on DC plans and plan participants.”       

ERIC further urged the agencies to provide a genuine safe harbor for the selection of an annuity provider. In 2008, the DoL issued a regulation providing what the agency characterized as a safe harbor under the duty of prudence for the selection of an annuity provider and contract for benefit distributions from a DC plan.  

“The DOL’s purported safe harbor for the selection of an annuity provider offers no such assurance. The regulation is laced with critical undefined terms requiring subjective judgments and that therefore prevent the regulation from providing the compliance certainty that a genuine safe harbor provides,” Ugoretz said.

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