William Penn Life, 2010 (45. évfolyam, 1-12. szám)

2010-11-01 / 11. szám

aiMoneywise with Doug Miller

How safe are your retirement funds?

EACH MONTH I MAKE an effort to write about relevant topics, and I hope that you find them informative. Some months it is easy to find a topic to write about; other months it can be a bit of a struggle.

It is interesting where ideas for columns come from. Sometimes it is something that a family member asks about, other times a billboard or news-talk segment that's noticed on the way to work.

This month's "inspiration" was an email I received from a brokerage account in which I have some investments. The firm is a good one, one of the largest in the country. The email was an on-line trade confirmation. It indicated that I could look at the details of the trade and call them if I had any questions. All of that was okay, but what interested me were the three disclaimers at the bottom of the brief email:

Securities and Insurance Products:- Not Insured by FDIC or Any Federal Government Agency- May Lose Value- Not a Deposit of or Guaranteed by a Bank or Any Bank Affiliate

So, what is it that struck me and gave me inspiration for this article? It certainly could have been that my investments, like many of yours, have languished over the last

Strength In numbers

One key indicator of an insurance company’s financial strength, and the level of confidence you can have in it’s ability to protect your investments, is the company’s “solvency ratio.” The solvency ratio measures a company’s admitted assets against it’s liabilities. Why is this ratio important to you? Simply put, the greater the ratio of assets to liabilities, the greater your safeguard and guarantee that the benefits promised in your insurance and annuity certificates will be paid to you or your beneficiaries when due.

Here's how William Penn Association stacks up against some of the country's largest insurers (as of Dec. 31,2009):

Insurer Solvency Ratio

William Penn Association..........................I I 1.08%

Metropolitan Life Insurance Co. (MetLife).......... 104.52%

Transamerica Occidental Insurance Co.............. 105.21 %

American General Insurance Co. (AIG)............. 105.1 \ %

Thrivent Financial for Lutherans........................ 108.21 %

Industry-wide Average..................................... 108.00%

two years. I would have used the word "cratered," but thank goodness for a bit of a recovery this year. It also could have been the fact that before I ever heard of William Penn Association, I purchased a variable annuity product from another company that is struggling mightily to come close to the cash value that I originally put in it. The death benefit has grown, but I'm not going to live on the death benefit in my retirement. My wife may enjoy it with her next husband. The topic for this article is safety, security and asset groivth. Many agents-and even some members—have asked who backs our insurance and annuity deposits. WPA—in fact, all fraternal societies—are not covered by the FDIC because no fraternal society has ever been liquidated. However, WPA is required to maintain reserves for every dollar that our members have on deposit. These reserves are closely monitored by the National Association of Insurance Commissioners (NAIC) and state insurance departments. So, when you look at our annual financials (which we publish every April), you'll see words like "assets," "reserves" and "solvency."

WPA is a very strong and financially well-run association. At the close of 2009, WPA's admitted assets stood at $199,480,223, and our surplus was $19,894,192. Our solvency ratio was 111.08%—that translates to WPA having $111.08 in assets for every $100.00 of liabilities. That is very strong. To gain an appreciation of our financial strength relative to that of other public life and annuity companies, look at the accompanying table. You can also visit the Pennsylvania Insurance Department website at www. insurance.pa.gov to view their evaluation of WPA and other fraternal association's relative strength.

No one has lost a penny of their deposits in a William Penn Association annuity product. And there are no "loads" or fees. Every dollar is invested for the benefit of our members.

As I've noted in several Moneywise columns, I'm an advocate of maintaining a balanced approach to managing your money. It may be tempting to ride the wave of an upward moving stock market, but it would be prudent to provide some diversification with a portion of your retirement dollars in a safe and stable fixed annuity or insurance policy from William Penn Association.

After all, WPA is very strong—because our strength comes from our members. □

Photo of safe (c) Endrille/Dreamstime.com

6 0 November 2010 0 William Penn Life