Products May 9, 2007

John Hancock Expands Managers for Variable Annuities

John Hancock Annuities has added three new asset allocation options from American Funds and Franklin Templeton to John Hancock Trust (JHT), the firm’s variable annuity investment platform.
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The three new asset allocation options are:

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  • Franklin Templeton Founding Allocation, a fund of funds which invests equally in three underlying funds: Global (invests in stocks around the world, including those in the U.S. and emerging markets); Income (invests in both equity and debt securities, focusing on dividend-paying stocks and undervalued bonds); Mutual Shares (invests in undervalued stocks as well as risk arbitrage securities and distressed companies).

  • American Asset Allocation, which invests directly in American Funds Insurance Series (“AFIS”) Asset Allocation Fund. The AFIS fund is managed with a similar investment objective as American Funds American Balanced Fund, investing between 40 – 80% of assets in stocks and between 20 – 50% of assets in bonds, including up to 15% in foreign stocks and up to 5% in foreign bonds.

  • American Funds Global Diversification, a model portfolio consisting of five funds: 50% American Global Growth, 10% American High Income, 5% American New World, 15% American Global Small Cap, and 20% American Bond. Each of these five funds invests directly in funds of the same name managed by AFIS.

The change was effective May 1.

“John Hancock is focused on bringing premier asset management capabilities to the platforms that underlie our variable annuities. We also have long been proponents of a balanced, disciplined investment strategy through the use of asset allocation funds, including our own Lifestyle series of portfolios, which we have offered since 1996,” said Marc Costantini, President, John Hancock Annuities.

Compliance May 9, 2007

Senate Bill Aims to Help Women with Retirement Planning

Legislation reintroduced into the U.S. Senate aims to prompt greater retirement planning for women.
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The legislation gives new tax incentives for annuities, imposed new employer mandates regarding sponsorship of qualified retirement plans and changed certain rules governing plan distributions, NewsEdge reported.

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The thought is that both women and men would benefit from the measure, but women would especially benefit from receiving guaranteed lifetime income in retirement because they typically live longer than men, Frank Keating, the president and CEO of the American Council of Life Insurers, told the news service.

If passed, the Women’s Retirement Security Act would regard 50% of lifetime annuity payouts generated from non-qualified contracts, up to $20,000 annually, as tax free. However, for individual retirement accounts (IRAs), 401(k) plans or other employer-sponsored plans, 10% of annuitized payout, up to $2,000, would be tax free.

The act would also force employers sponsoring 401(k) plans to allow participation by part-time employees who remain with the company for a certain period of time and would also require those employers not offering retirement plans to divert a portion of workers’ paychecks into an IRA.

Supporters say the changes to the distribution rules governing qualified plans would promote the purchase of longevity insurance – or lifetime annuities whose payments are deferred to coincide with the end of beneficiaries expected life span. The value of the longevity insurance would not be considered with regard to tax-qualified plans’ minimum distribution rules, which apply at age 70.5.

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