Often seen as negative, being bored at work can
increase creativity because it gives us time to daydream, Drs. Sandi Mann and
Rebekah Cadman from the University of Central Lancashire discovered after conducting two studies.
In the first study, 40 people were asked to copy numbers out of a telephone directory for 15 minutes.
Next, they brainstormed different ways to use a pair of polystyrene cups.
The 40 people who had copied telephone numbers showed more creativity than a control group of 40 people who had been asked only to come
up with uses for the cups.
In its next study, the
research team introduced a second rote task that allowed even more possibilities for
daydreaming than the dull writing alone. In this study 30 people
copied numbers as the control group, while a second group read the numbers instead of writing them.
Participants in the control group
were the least creative, researchers found, but the people who had simply read the names were more
creative than those who had to write them out. This suggests that more passive
boring activities, such as reading or perhaps attending meetings, can lead to more
creativity. Writing, by reducing the scope for daydreaming, reduces
the creativity-enhancing effects of boredom.
"Boredom at work has always been seen as something to
be eliminated, but perhaps we should be embracing it in order to enhance our
creativity,” Mann said. “What we want to do next is to see what the practical
implications of this finding are. Do people who are bored at work become more
creative in other areas of their work—or do they go home and write
novels?"
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Guaranteed Lifetime Withdrawal Has Benefits, Risks
Benefits, risks and regulation that
varies from state to state can make choosing annuities with guaranteed lifetime
withdrawals tricky for older Americans.
While annuities with guaranteed
lifetime withdrawals can help older Americans ensure they do not outlive their
assets, they do present some risk to consumers, the Government Accountability
Office (GAO) said in a report.
Two such products—variable annuities
with guaranteed lifetime withdrawal benefits (VA/GLWB) and contingent deferred
annuities (CDAs)—share a number of features but have some key structural
differences.
Both annuities provide access to
investment assets and the guarantee of lifetime income, but while VA/GLWB
assets are held in a separate account of the insurer for the benefit of the
annuity purchaser, the assets covered by a CDA are generally held in an
investment account owned by the CDA purchaser, the GAO said.
According to industry participants,
while annuities with GLWBs have been sold for a number of years, CDAs are
relatively new and are not widely available. The GAO was asked to review issues
relating to these financial products.
One benefit of these products is a
steady stream of income regardless of how the investment assets perform or how
long the consumer lives. At the same time, the consumer maintains access to
their assets for unexpected or other expenses. VA/GLWBs and CDAs are complex
products that present some risks to consumers and require them to make multiple
important decisions.
For example, consumers might
purchase an unsuitable product or make withdrawal decisions that could
negatively affect their potential benefits. The GAO spoke to several insurers
and regulators that said it was important for consumers to obtain professional
financial advice before purchasing these products. These products can also
create risks for insurers that, if not addressed, could ultimately affect
insurers’ ability to provide promised benefits to consumers.
VA/GLWBs are considered to be both
securities and insurance products, and are therefore covered by both federal
securities regulations and state insurance regulations.
(Cont’d…)
The National Association of
Insurance Commissioners (NAIC) committee responsible for life insurance and
annuities products has determined that CDAs are life insurance products subject
to state law and regulation for annuities. According to officials at the
Securities and Exchange Commission (SEC), existing CDAs have been registered as
securities with SEC, and therefore are covered by both federal securities laws
and regulations, and state insurance regulations.
At the state level, NAIC has
developed state disclosure and suitability regulations for annuity products.
However, states differ on the extent to which they have adopted these annuity
regulations, and some have no protections at all.
As a result, consumers in states
that have adopted different regulations may have different levels of
protection. NAIC and state regulators told the GAO that they are currently
reviewing the regulations of CDAs.
In March 2012, NAIC began reviewing
existing annuity regulations to determine whether changes are needed to address
CDAs’ unique product design features, including potential
modifications to annuity disclosure and suitability standards. NAIC is also
reviewing what kinds of capital and reserve requirements may be needed to help
insurers manage product risk.
NAIC and the National Organization
of Life and Health Guaranty Associations are each working to determine whether
state insurance guaranty funds, which protect consumers in the event insurers
become insolvent, cover CDA products. Both agree that each state will have to reach
its own conclusion about whether their particular state guaranty fund laws
allow for CDA coverage. Until these regulatory issues are resolved, consumers
may not be fully protected.
The GAO’s report compares the features
of the two types of annuities, and examines potential benefits and risks to
consumers as well as potential risks to insurers. The GAO examines the
regulation of these products and the extent to which regulations address consumer
risk. The GAO analyzed insurance company product information, proposed and final
rules and regulations, and studies and data related to retirement and product
sales. The GAO also interviewed federal and state regulators, as well as insurers,
consumer advocates and industry organizations.
“Annuities with
Guaranteed Lifetime Withdrawals Have Both Benefits and Risks, But Regulation
Varies Across States,” the GAO’s report on one aspect of retirement security, can
be viewed here.