Lincoln and RiverSource on watch; New business temporarily suspended as of 6-1-09

Lincoln National Life Insurance Company has recently had multiple downgrades from ratings agencies and fails to meet the UW TSA program criteria for minimum financial strength. RiverSource has failed to meet the UW TSA program criteria for minimum financial strength since 2006, although its ratings have remained relatively stable throughout the recent economic downturn that has affected many company ratings.

The UW Tax-Sheltered Annuity Review Committee (TSARC) voted to recommend that the UW 403(b) Program take action to restrict Lincoln National Life Insurance Company and RiverSource Life Insurance Company because they fail to meet the minimum financial stability ratings required by the University. University of Wisconsin System President Kevin Reilly approved the recommendation.

The restrictions include:
1) As of June 1 temporarily suspending Lincoln’s and RiverSource's ability to enter into new TSA contracts. Employees with existing contracts may continue their contributions.
2) Notifying affected participants of Lincoln’s and RiverSource's failure to meet criteria requirements.
3) Permitting participants who have fixed annuity investments to move those investments to a different company in our plan or to a variable sub-account with the same company without surrender charges. This condition will remain in effect until the company's ratings improve to meet the standards in the Criteria.

The action to temporarily suspend Lincoln’s and RiverSource's ability to write new business gives the committee time to evaluate its ratings standards and the companies' financial stability before taking permanent action. A subcommittee of TSA Review Committee members and outside experts will meet this summer.

There are 6 investment providers in the UW TSA 403(b) plan. Other providers include Dreyfus, Fidelity, T.Rowe Price, and TIAA-CREF.

The UW TSA 403(b) Plan is a very low-cost, convenient, and easy way to save for your long-term goals. Here is our list of UW TSA providers. If you'd like to enroll with another provider, How to enroll in the TSA Program helps you through the enrollment process and provides links to online enrollment.

If you have questions, you may contact your benefits office or e-mail the TSA benefits specialist.

This document was last revised on May 29, 2009