by John Darer® CLU ChFC CSSC RSP
The structured settlement watchdog calls on Don McNay to share the lump sum dissipation study that is currently cited on his website for the good of the structured settlement industry. Another firm, Plaintiff Settlement Solutions, Inc., is called out to back up its dissipation claims with a cite.
Then NYU tax law student Jeremy Babener concluded in a 2009 white paper, after what NYU Law School described as "assiduous research", that the often cited lump sum dissipation "statistic" of "90% in 5 years" was not backed up by empirical evidence. while acknowledging that there is plenty of anecdotal evidence- Justifying the Structured Settlement Tax Subsidy and Expanding Its Application, Annual Meeting & Educational Seminar of the Society of Settlement Planners (Washington, D.C., May, 2010). Concurrent to the release of Babener's paper, Patrick HIndert of S2KM and co-author of a seminal industry text, described Babener's "lynch pin" as part of what he dubbed "pernicious" lies promoted by the industry.
Despite Babener's research a number of structured settlement stakeholders continue to make factual assertions regarding dissipation that conflict with Babener's findings. The following shows that there is even a 5% swing between facts asserted about dissipation by several structured settlement stakeholders
- Due to the difficulty of self-managing a cash settlement, 92% of all claimants exhaust their funds completely within the first five years."--John Bat, Plaintiff Settlement Solutions, Inc., Castle Rock, Colorado (currently published as of July 30, 2011: 1145am EDT)
- A Stanford University study showed that 90% of all lump sums are dissipated within five years. Don McNay, CLU ChFC MSFS, Richmond, KY, a "HuffPo" columnist and former Board members of NSSTA, from Structured Settlements in Workers Compensation cases January-February, 1995 Edition of the Kentucky Academy of Trial Attorney’s Advocate (currently published as of July 30, 2011 at 1145am EDT)
These folks have not expressed opinions. They have made, and continue to publish (at time of this writing) these factual assertions. I am simply asking them to prove the asserted facts to the public.
Don and John, if you have a copy of the Stanford study please share it with the industry and the public by posting it to your website. I, for one, think we need a "Cardinal Rule" on dissipation.
Copies of these studies would provide a tremendous benefit to promoters of annuities and longevity insurance? ?
And "Captain J-Bab", if you are reading this, feel free to weigh in.