Diversions September 30, 2010

Who to Call If a Spaceship Lands in Your Backyard

A rumor has been circulating this week that the U.N. named a Malaysian astrophysicist as the official “greeter” for extraterrestrial visitors to Earth.
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It began with an article in London’s Sunday Times which said that the United Nations has appointed Mazlan Othman, head of the Office for Outer Space Affairs (UNOOSA), as being the official “first contact” for any outer-space visitors from now on.   The story was picked up by news outlets worldwide; the U.N. is now attempting to quash the rumor.   

“The mandate of the Office for Outer Space Affairs is defined by the United Nations General Assembly and there are no plans to change the current mandate,” Jamshid Gaziyev, a spokesman for the U.N., told FoxNews.com.

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Othman was expected to formally announce the new position at a scientific conference in Buckinghamshire, England next week, according to the Times article.   

As the basis for its “scoop,” the Times cited a speech Othman delivered recently in which she apparently said: “The continued search for extraterrestrial communication, by several entities, sustains the hope that someday humankind will receive signals from extraterrestrials. When we do, we should have in place a coordinated response that takes into account all the sensitivities related to the subject. The U.N. is a ready-made mechanism for such coordination.”

The article went on to quote Professor Richard Crowther of the U.K. Space Agency who leads British delegations to the U.N. on such matters, as saying, “Othman is absolutely the nearest thing we have to a ‘take me to your leader’ person.”

The last time the U.N. dabbled in communicating with aliens was in 1977 aboard the two Voyager spacecrafts.  Phonograph records were created with images and sounds from Earth, along with a printed message from President Jimmy Carter and U.N. Secretary-General Kurt Waldheim. The phonographs are still out there, waiting to be picked up by some inquisitive life form…who will learn that this thing called the “Dow” closed the year at 831 and Star Wars – ironically – was the blockbuster of the year.     

Products September 29, 2010

PANC 2010: Retirement Income – The Next Generation

At the PLANADVISER National Conference in Orlando last week, the panelists were unanimous: it’s not a matter of “if,” but rather “when” retirement income products become mainstream.
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It’s been brewing slowly but surely for years and plan advisers and plan sponsors are equally curious about the future of retirement income options.  James Lyday, Senior Vice President, Distribution SecureRetirement Solutions at Prudential Retirement, began the discussion describing retirement income as “evolutionary, not revolutionary,” meaning it’s the logical next step in retirement planning.  However, he said, as it stands right now, most advisers aren’t knowledgeable enough on the subject to properly pitch it to sponsors.

Lyday said that in the past, the only options for retirement income were constricted to being in-plan or out-of-plan.  He said the out-of-plan options–annuities and rollovers-have failed and that more advisers who are studying this new terrain are favoring in-plan retirement income choices.   

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George Revoir, Senior Vice President, Distribution at John Hancock Financial Services, said advisers should stop thinking about retirement income in terms of annuities and start thinking in withdrawal balance language.  “Basic understanding of the verbiage will change the view on it from the market standpoint,” he said.   

Fred Conley, Vice President at Goldman Sachs Asset Management, suggested that advisers think about retirement income options on a spectrum; on one side you have more control over account balances, and on the other you have riskier investments that generate more money.  It’s a matter of finding balance between the two sides.

Next Steps… 

In order for retirement income options to really take-off as the panelists expect them to do, a few things still need to happen.    

For one thing, vendors need to be producing and pushing more products into the market, said Revoir.  Not only do we need more products, he said, but we need to be able to differentiate between them–what are the selling points of one product versus another?   

Conley said that Goldman Sachs is working on something, but he was unable to disclose any details or a timeframe, only assuring the audience that Goldman’s approach is “actively being researched.”

Start the conversation… 

Relatively speaking, in-plan retirement income options are still new.  But they won’t be new forever, said Lyday.  He predicted that they will be mainstream in six to twelve months.  By starting to talk about the options with current–or prospective–clients now, you’ll be giving yourself an edge.  Even if they don’t chose to incorporate it into their plan, at least they’ll know they have an adviser who is forward-thinking.   

Lyday also mentioned a main concern of sponsors is the safe harbor provision, and that they’re nervous they would be liable to a participant for life–something they don’t want to deal with.  He said the Department of Labor is still working on those details and he expects them to come out soon.

Revoir left the advisers with this though: “People will continue to talk about this, so the more comfortable you are with the products, the better off you’ll be.”

And Conley reassured the audience that retirement income is something they can handle: “Lifetime income is a natural extension of your retirement practice;” it’s not an entirely new plan, but a feature to add to existing plans.   

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