why sell in the governmental 457(b) & 401(a) markets? Overview at a glance

why sell in the governmental
457(b) & 401(a) markets?
at a glance
Overview
State and local governments
• 8.3 million employees (not including education and hospitals)1
• More likely than private employers to provide retirement benefits
• Employee retirement plans
•4
57(b) plans: Similar to 401(k) plans with some key differences
•4
01(a) plans: Employer-only contributions
The Opportunity
Governmental 457(b) plan assets are projected to grow from $195 billion in 2011 to $298 billion by 20162
457(b) Plan Projected Growth (billions)
$300
$250
$200
$189.0
$194.8
2010
2011E
$213.1
$232.9
$253.7
$275.5
$298.3
$150
$100
$50
$0
2012E
2013E
2014E
2015E
2016E
The Market
Some 87,500 local governmental entities3
• Cities and towns
• State entities and counties
• Municipalities and political subdivisions
1 Bureau of Labor Statistics, 2010.
2 Investment Company Institute; Cerulli Associates.
3 U.S. Census Bureau, www.census.gov.
For Financial Professional Use Only. Not for Use
with, or Distribution to, the General Public.
•S
pecial taxing districts and authorities
– Bridges
– Housing
– Ports
– Highway
– Water and sewer
– Police, fire and
– Airports
emergency services
Unique Benefits of 457(b) Plans
• Potential to contribute up to $34,000 in 2012
–B
asic annual limit: $17,000
–A
ge 50+ catch-up: $5,500
–P
otential to contribute an additional $17,000 if within 3 years of the plan’s normal retirement age, in lieu of the
age 50+ catch-up contribution
• No early withdrawal penalty for distributions if participant retires before age 59½4
•D
istributions are taxable
–E
arly distribution penalty applies to withdrawals of rollovers transferred into a 457(b) plan from other eligible
retirement plans
•P
ension Protection Act allows public safety workers to retire at age 50
Unique Benefits of 401(a) Plans
• Opportunity to enhance benefits for selected employees
–E
mployers can contribute up to $50,000 in 2012 to a 401(a) plan
–M
ay fully fund both a 457(b) plan ($17,000) in 2012 AND a 401(a) plan — no aggregation required
• Employer can choose groups to cover
–N
o discrimination concerns for governmental entities
Government Plans – Benefits to You
• Grow and diversify your book of business
• Gain access to decision makers and centers of influence
• Potential for steadily increasing AUM growth with no
additional sales efforts
–O
ngoing contributions
–N
ew enrollees
–S
tickier dollars—less asset churn
•A
dd-on sales potential
– Individual accounts
– Retirement rollovers
– Life insurance
– 529 plans
– Potential defined benefit plan opportunities
Interested in Learning How You Can Start Selling?
Contact the Retirement Gateway® Sales Desk at (866) 401-3030, Option 1.
4 Withdrawals permitted only if separated from service or over age 70½.
AXA Equitable Life Insurance Company (NY, NY). Distributors: AXA Advisors, LLC and AXA Distributors, LLC. AXA Equitable, AXA Advisors and
AXA Distributors are affiliated companies and do not provide legal or tax advice.
IU-67869 (6/12) (Exp. 6/14)
For Financial Professional Use Only. Not for Use
with, or Distribution to, the General Public.
G29264
Cat. #149860 (5/12)