On the other hand, if the employer is asleep at the switch and simply outsources investment decision-making regarding the plan to, say, an insurance company, the investment options will almost certainly be wrapped in a high-cost, high-risk variable annuity.

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The county got the stability of a fixed rate, while paying Wall Street to assume the risk of the variable rates on its bonds.

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Once demand recovers, or at least stabilizes, Weiss sees good return potential in the sector and said he prefers to avoid companies that concentrate in refining and marketing since they have greater volatility and are therefore recommended for investors with higher risk tolerance and a variable holding period.

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Interestingly, the SEC just announced the increasing use of alternative and hedge fund strategies by mutual funds, ETFs and variable annuities as a new and emerging risk.

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But variable rates also expose the buyers to greater risk.

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The market rumbles in risk on, risk off variance, shying at every macro variable that could spell trouble.

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The answer is, overwhelmingly, insurance companies peddling high-cost, tax-deferred variable annuities with crappy proprietary mutual fund options and high-risk fixed accounts.

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Their dividends are variable, their cash flows less certain and therefore an equity risk premium should exist which compensates stockholders for their junior position in the capital structure.

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