What a year 2025 has been for the annuity world, right? On one hand, business is absolutely booming. I mean, we saw sales hit a new record in the third quarter—a staggering $119.3 billion. That’s the eighth quarter in a row we’ve topped $100 billion. The industry is on track to smash $400 billion in total sales for the year. It’s incredible.
But here’s the thing about our industry: even when the numbers look great, there's always drama bubbling just beneath the surface. And this year was no exception. Behind those record sales, we had major lawsuits, surprising layoffs, and a buyout saga that kept us all guessing for months.
So, let's grab a coffee and unpack the five stories that really defined the year. These are the conversations we were all having, the headlines that made us stop and think, and the events that will likely shape what comes next.
Is the 4% Rule Officially Dead?
We’ve all been part of this debate for years, haven't we? The classic "4% rule" versus using an annuity for retirement income. Well, this year, some compelling research published in the Journal of Retirement gave us a lot to talk about.
The big takeaway? The researchers found that retirees get better results by incorporating annuities into their plan rather than just sticking to the old 4% withdrawal strategy.
It turns out that for folks with smaller nest eggs—say, under $250,000—annuitizing a big chunk, or even all, of their savings leads to a more secure retirement. For those with more saved up, the winning formula seems to be a combination: using annuities for a baseline of guaranteed income and then making systematic withdrawals from other investments.
Honestly, this isn't a huge surprise to many of us in the field. The 4% rule has always felt a bit shaky. It’s flexible, sure, but the study highlighted its significant failure rates, especially as people get older. Think of it like trying to make a bucket of water last for 30 years by only taking out a small cup at a time. It might work, but what if you hit a dry spell (a market downturn) or the bucket has a slow leak (inflation)? An annuity, in this analogy, is more like having a reliable tap that never runs dry.
The Verizon Lawsuit: A Shake-Up in the Pension World
This next story really got people talking. In late 2024, a group of former Verizon employees filed a lawsuit that puts a spotlight on something we see a lot of these days: pension risk transfers, or PRTs.
Here’s the rundown. Verizon made a massive $5.9 billion deal with Prudential and RGA to handle the pension funds for about 56,000 of its retirees. Basically, Verizon handed over the responsibility (and the risk) of paying out those pensions to the insurance companies. It’s a pretty common move for big corporations.
But the retirees are worried. Their lawsuit claims this deal actually threatens their retirement funds. What's really interesting is who they're suing. They didn't go after Prudential or RGA. Instead, the lawsuit names Verizon and the groups associated with its pension plan. The retirees are essentially saying to their old employer, "You made a choice that puts our financial future at risk."
This isn't the first time Verizon and Prudential have done this dance—they had a similar $7.5 billion deal back in 2012. This new lawsuit is still active, and you can bet we'll all be watching to see how it plays out. It raises some big questions about corporate responsibility when it comes to old promises made to loyal employees.
When Good Numbers Aren't Good Enough: The F&G Layoffs
This one was a bit of a head-scratcher and a tough pill to swallow for many. Back in May, F&G Annuities & Life announced they were laying off 192 employees.
The news was shocking because, on the surface, F&G seemed to be doing great. They had a record $67.4 billion in assets under management, a massive 169% increase from the year before. Their revenue for the first quarter blew past forecasts, coming in at $2.18 billion when analysts only expected $1.37 billion.
So, what went wrong? It all came down to one little number: earnings per share (EPS). F&G reported $0.72, which was a big miss compared to what Wall Street was expecting. And in the world of publicly traded companies, perception is everything. That single miss sent investors running for the exits. The company's stock dropped about 12% overnight, and at that point, it had lost nearly 35% of its value in just six months.
It’s a harsh reminder that even in a booming market, you’re only as good as your last earnings report. For the 192 people who lost their jobs, it was a brutal lesson in the sometimes-unforgiving logic of the stock market.
A Legal Battle with a Confusing Outcome
You know a story is complicated when both sides walk away from a verdict claiming they won. That’s exactly what happened in the long-running legal saga involving advisor Jeffrey Cutter and his firm, Cutter Financial Group.
The SEC had accused him of making improper annuity sales. In April, a Massachusetts jury came back with a split decision.
Let me break it down simply. They found Cutter not guilty of violating one part of the law (Section 206(1)), which deals with intentional fraud. However, they found him guilty of violating another part (Section 206(2)), which is broader and covers any business practice that acts as a "fraud or deceit" on a client, even if it wasn't intentional.
Cutter immediately put out a press release claiming a major victory, saying the jury agreed he didn't "intentionally or recklessly defraud any clients." As you can imagine, the SEC wasn't thrilled with that spin and even asked for more sanctions because of it. The whole messy affair is still ongoing, and it just goes to show how complex—and how personal—these legal fights can get.
The Buyout Saga: Who's Buying Brighthouse?
Finally, we have the drama that felt like a TV show playing out all year: the sale of Brighthouse Financial. The rumor mill was churning for months, and analysts were trying everything they could to get a straight answer.
It all came to a head during a testy second-quarter earnings call in August. When pressed about the sale rumors, CEO Eric Steigerwalt just shut it down, saying, “With respect to any market rumors, I don't have any comments on that.”
The "will they or won't they" suspense finally ended in early November. Brighthouse confirmed it was being acquired by Aquarian Capital in a massive $4.1 billion deal. Aquarian is buying them out for $70 per common share in cash.
This is a big deal, not just for Brighthouse, but for the industry as a whole. It marks another major annuity provider being snapped up by a private equity or investment management firm. We've been seeing this trend for a while now, and it’s fundamentally changing the landscape of the annuity market.
So there you have it. A year of record sales mixed with some serious growing pains and big changes. It just proves that no matter how good things look on paper, our industry is never, ever boring. It’s a constant reminder to stay on our toes, keep learning, and always be ready for the next headline.
