By: Barry James Dyke
IF IT'S GOOD ENOUGH FOR BANKERS . . .
According to government disclosures, Federal Reserve Chairman Ben Bernanke has a majority of his liquid wealth—between $1 million and $2 million—invested in fixed and variable annuities, which are contracts issued exclusively by life insurance companies that promise guaranteed rates of interest.
What's more, the 401(k) Thrift Plan for Employees of the Federal Reserve System, according to a 2009 first-quarter Fed report covering 22,000 Fed employees, has 75 percent of its assets—that's $3.2 billion—invested in its fixed-income fund, which is invested exclusively in annuity contracts underwritten by major U.S. life insurance companies guaranteeing principal and an interest rate of 5.8 percent.
And this is not a new trend. A Deloitte audit affirms that in 2007 and 2006, Fed employees overwhelmingly chose fixed-income annuity funds over volatile mutual funds.
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