About two weeks ago, Huffington Post blogger (and former EBN contributor) Jane White sparked a bit of controversy when she called retirement plan annuities "the biggest financial rip off on the planet."
“The Obama Administration appears to be duping older workers into thinking they are ready [for retirement] — despite the fact that they have only saved one-tenth of what they need — and simply need a product that will stretch their puny nest egg over a lifetime,” White wrote on the site Oct. 12.
Last week, CBS MoneyWatch writer Steve Vernon responded directly to White, calling her anti-annuity arguments “uninformed,” saying she had a “complete lack of understanding of the process in which 401(k) plans are designed and implemented by employers.”
In an April EBN report, experts cited fiduciary concerns, lack of portability, high costs and low participant demand as reasons that employers’ acceptance of annuities in 401(k) plans wasn’t more widespread. “Once you put these products in the plan, they're very difficult to get rid of or to change, and that's a problem for plan sponsors because it effectively handcuffs them to a particular vendor for what might be decades,” Christopher Jones, chief investment officer with Financial Engines, told Managing Editor Andrea Davis.
Tell us what you think. Does your retirement plan offer an annuity? If not, what’s holding you back? Are you on Team White or Team Vernon. Share your thoughts on EBN’s Facebook page or via Twitter @EBNmagazine.
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