Wednesday, December 20, 2006

ICI Comment Letter to IRS on Efforts to Simplify 403(b) Rules, February 2005#TopOfPage

ICI Comment Letter to IRS on Efforts to Simplify 403(b) Rules, February 2005#TopOfPage

ICI Comment Letter.........

Scott Dauenhauer, CFP, MSFP, AIF

SIA Lobbying Letter to Treasury

403(b) proposed regulations - Google Search

It seems nobody in the industry likes the new regs. Perhaps it is because they know that under the new regs the "wild, wild, west" mentality will begin to be tamed.

Scott Dauenhauer, CFP, MSFP, AIF

ASBO Lobbys the IRS

403(b) proposed regulations - Google Search

Some additional interesting information from another oranization lobbying to change some of the proposed regulations.

Scott Dauenhauer, CFP, MSFP, AIF

Annuity Industry Begs IRS - Will They Succeed?

D & H

The annuity industry is not happy about the proposed 403(b) regulations and they are making themselves heard. In June of this year their lobbyist send a letter to treasury requesting a new delayed effective date and special grandfathering rules that appear to benefit the industry.

It looks like they got their first wish, the effective date has been pushed to January 1st, 2008. However there has not been any talk about a grandfathering clause.

Stay tuned.

Scott Dauenhauer, CFP, MSFP, AIF

Thursday, December 14, 2006

Wednesday, December 13, 2006

CalPERS panel urges rate boost

Politics - CalPERS panel urges rate boost -

When I first started in the business of working with educators I can across the CalPERS Long Term Care program and generally liked it. I even recommended it because the premiums were so low.

However, as I learned more about long term care insurance and learned more about the CalPERS plan I began to recommend that clients buy a policy from a private insurer. My reasoning was that CalPERS was not charging enough and that they would have to raise premiums at some point, in addition, they are not an insurance company and are required to abide by the same rules that govern insurance companies. I didn't like the lack of safeguards nor the fact that premiums would have to increase.

I thought CalPERS was basically attempting to buy the business with low premiums. I want to make clear that I am not accusing CalPERS of market manipulation. I actually believe their intentions were sincere and they thought their policies were priced appropriately.

The fact remains that I am not an actuary, yet I knew several years ago that the premiums would have to rise, sure enough in 2003 CalPERS raised the premiums by an average of 17%.

Even after the premium raise I remained skeptical, and still do. Now CalPERS is proposing to raise the premiums by nearly 34%. This means that for every $100 in premiums, policyholders will be paying $57 more than they were paying in 2002, a 57% increase. Had policyholders known this they may have opted for a private insurance policy that was more expensive at the time, but provided better benefits and a better future in terms of rate increases.

I want to make something very clear - I do not sell Long Term Care Insurance and I don't recieve any money from the insurance industry or insurance agents. I don't have a vendetta against CalPERS because I lost insurance sales, I am just concerned for the public employees who purchased this policy in good faith.

It is my opinion that CalPERS is in over its head and needs to reform the Long Term Care Insurance Plan. My advice is that they do not institue the 34% increase yet, instead they embark upon a plan where they outsource their long term care program to a private insurer and continue to sell it as a private labeled plan. The private insurer chosen can then put together an accurate assesment of the real costs and a discussion of rate increases can continue. I believe rates must be increased, but I don't feel comfortable with the management of this plan by CalPERS.

Just my two cents...

Scott Dauenhauer, CFP, MSFP, AIF

Changing 403(b) Plans for Changing Times

A good friend and colleague of mine, Barbara Healy helped pen this piece about the what to expect and how to proceed in the new world of 403(b). Everybody who is a decision maker of a 403(b) plan should read this.

Scott Dauenhauer, CFP, MSFP

Reproduced with permission from the Benefits & Compensation Digest, Volume 43, No. 12, December 2006, pages 1, 19-23 published by the International Foundation of Employee Benefit Plans (, Brookfield, WI. Statements or opinions expressed in this article are those of the author and do not necessarily represent the views or positions of the International Foundation, its officers, directors or staff. All rights reserved.