joel Posted December 22, 2004 Share Posted December 22, 2004 NY law prohibits the use of annuities as a funding medium. This in my view recognizes the principle that the purchase of an annuity with pre-tax dollars is like using an umbrella indoors. Q.: Please identify the other states that have the same prohibition. Link to comment Share on other sites More sharing options...
Demosthenes Posted December 22, 2004 Share Posted December 22, 2004 Forget the states! What fiduciary, in his/her right mind, would permit them in the plan? I know the answer is most 403(b) and 457 plans, but it doesn't change the fact that the benefit to the producer is a legalized (in most states) form of theft. Link to comment Share on other sites More sharing options...
mbozek Posted December 22, 2004 Share Posted December 22, 2004 Joel: What NY law section are you referring to? mjb Link to comment Share on other sites More sharing options...
joel Posted December 23, 2004 Author Share Posted December 23, 2004 Demo: I could not agree with you more! mb: I was informed about this requirement from someone that is in a position to know. I will try to get the citatation and post it up. Link to comment Share on other sites More sharing options...
joel Posted December 23, 2004 Author Share Posted December 23, 2004 mb, Here is the citation Joel ---------------------------------------------------------------------------------------------- NY State Finance Law, § 5; L. 1982, ch. 547) Sec. Sec. 9003.1 Contracts or agreements 9003.5 Miscellaneous requirements 9003.2 Competitive proposals 9003.6 Acknowledgment 9003.3 Criteria for selection 9003.7 Precluded investments 9003.4 Provision of diverse investments 9003.8 Transfer of assets 9003.7 Precluded investments. No contract or agreement entered into with a financial organization may provide for the investment of any amounts under a plan in any annuity contract providing for a term which could exceed five years or which is measured by one or more natural lives or any life insurance or other contract providing traditional death benefits. Link to comment Share on other sites More sharing options...
david rigby Posted December 23, 2004 Share Posted December 23, 2004 I don't see anything in the quoted regulation about a plan. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
joel Posted December 23, 2004 Author Share Posted December 23, 2004 9003.7 Precluded investments. No contract or agreement entered into with a financial organization may provide for the investment of any amounts under a plan........ Link to comment Share on other sites More sharing options...
david rigby Posted December 23, 2004 Share Posted December 23, 2004 OK, so I don't read very well. But, my point is that the reg should be reviewed in context. It might have a purpose other than relating to a retirement plan, and the word "plan" in the text might mean something other than retirement plan. I don't know, and I don't care. I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
joel Posted December 23, 2004 Author Share Posted December 23, 2004 I don't know, and I don't care. ======================================== Pax: Are you feeling ok? Link to comment Share on other sites More sharing options...
joel Posted December 23, 2004 Author Share Posted December 23, 2004 For those of us who do care: Section 9001.1 Application; Incorporation by Reference. (a) This Subtitle shall be interpreted and applied so that any plan established hereunder shall be an eligible deferred compensation plan under section 457 of the Internal Revenue Code. Link to comment Share on other sites More sharing options...
joel Posted December 23, 2004 Author Share Posted December 23, 2004 Ted Siedle will be on Wall Street week tomorrow. He will be disclosing the shark like fees associated with 403(b) investing. Link to comment Share on other sites More sharing options...
david rigby Posted December 23, 2004 Share Posted December 23, 2004 Q.: Please identify the other states that have the same prohibition. What is the point? I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
mbozek Posted December 23, 2004 Share Posted December 23, 2004 I know of 457 plans established by municipal govts that are funded with VAs so I dont know what the reg prohibits. mjb Link to comment Share on other sites More sharing options...
joel Posted December 23, 2004 Author Share Posted December 23, 2004 Are these local governments in NY? Link to comment Share on other sites More sharing options...
mbozek Posted December 23, 2004 Share Posted December 23, 2004 Yes. mjb Link to comment Share on other sites More sharing options...
joel Posted December 24, 2004 Author Share Posted December 24, 2004 Posted on Dec 23 2004, 01:32 PM I know of 457 plans established by municipal govts that are funded with VAs so I dont know what the reg prohibits. ===================================================== It prohibits VAs as funding mediums...it would not be the first time a municipal government violated state law. Link to comment Share on other sites More sharing options...
david rigby Posted December 24, 2004 Share Posted December 24, 2004 What is the point? Once again... I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice. Link to comment Share on other sites More sharing options...
joel Posted December 24, 2004 Author Share Posted December 24, 2004 OK, so I don't read very well. But, my point is that the reg should be reviewed in context. It might have a purpose other than relating to a retirement plan, and the word "plan" in the text might mean something other than retirement plan.I don't know, and I don't care. You are a strange character inasmuch as you tell me you don't know and you don't care and then come back and pose a question. I elect not to discuss this topic with you because I am of the opinion you are mean spirited. Link to comment Share on other sites More sharing options...
GBurns Posted December 24, 2004 Share Posted December 24, 2004 pax, What does it matter what is the point if you don't care? George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction) Link to comment Share on other sites More sharing options...
mbozek Posted December 27, 2004 Share Posted December 27, 2004 Joel: Paragraph 8a of Section 5 of the NY State finance Law which authorizes the Deferred Comp board expressly permits insurance cos licensed by the NYS ins dept to be a financial organization which can administer a public employee 457 deferred comp plan and invest funds held under such plan. mjb Link to comment Share on other sites More sharing options...
GBurns Posted December 27, 2004 Share Posted December 27, 2004 But does it allow the insurance company acting as administrator of the 457 to use annuities etc since it prohibits " the investment of any amounts under a plan in any annuity contract providing for a term which could exceed five years or which is measured by one or more natural lives or any life insurance or other contract providing traditional death benefits."? George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction) Link to comment Share on other sites More sharing options...
mbozek Posted December 27, 2004 Share Posted December 27, 2004 The web site for the NYS def comp plan indicates that it is available for those employers who elect to adopt it. There does not appear to be a requirement that a NYS public employer can only adopt the NYS def. comp. plan under State finnace law Sect 5 which would leave NYS public ers free to adopt another plan that uses annuity products. Reg 9000.1 states that the rules of the Board apply to a 457 plan established by any municipal employer under sect 5 of the NYS finance law. mjb Link to comment Share on other sites More sharing options...
joel Posted December 27, 2004 Author Share Posted December 27, 2004 Reg 9000.1 states that the rules of the Board apply to a 457 plan established by any municipal employer under sect 5 of the NYS finance law. ==================================================== And rule 9003.7 states: 9003.7 Precluded investments. No contract or agreement entered into with a financial organization may provide for the investment of any amounts under a plan in any annuity contract providing for a term which could exceed five years or which is measured by one or more natural lives or any life insurance or other contract providing traditional death benefits. Link to comment Share on other sites More sharing options...
mbozek Posted December 27, 2004 Share Posted December 27, 2004 Reg. 9003.7 applies to investments under the NYS def comp plan established under Section 5 of the finance Law. The regs do not require municipal employers to adopt the NYS def comp plan. The instructions for the adopting the NYS def comp plan note that the rules apply to an employer who elects to adopt the plan. Reg 9001.2(a)(3) permits a govt employer to adopt another def comp plan that meets the requirements of IRC 457. mjb Link to comment Share on other sites More sharing options...
joel Posted December 27, 2004 Author Share Posted December 27, 2004 Section 9000.1 Scope. This Subtitle applies to every deferred compensation plan established by the board or any local employer pursuant to section 5 of the State Finance Law. This means that section 9003.7 prohibition of annuities as a funding medium applies not only to the 457(b) plan operated by the state government of NY but to 457(b) plans operated by local governments of the state of NY. Link to comment Share on other sites More sharing options...
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