Retirement income
Participants are sticking around for longer. How will you navigate their retirement income needs?
Video: Katie Hockenmaier discusses retirement income
The design of DC plans and communications, along with the mainstream media, have encouraged DC plan participants to leave assets in their prior employer’s plan after termination or retirement.
This benefits both the participant (through institutional quality investments and pricing) and the plan (through economies of scale). It also underscores the importance of developing a retirement income philosophy.
Most DC plans and committees are well versed in structuring prudent plans for the accumulation phase of the retirement savings journey. However, many have yet to develop an approach for supporting participants as they transition to and through retirement.
The market is rapidly developing new retirement income solutions and investment offerings. Recordkeepers are increasingly offering sophisticated education resources and tools aimed at facilitating the decision-making process for participant. In partnership with insurers, investment managers have developed guaranteed income solutions and are working with recordkeepers to facilitate their administration.
Some of the largest target-date fund providers are already live, or are in the process of launching guaranteed income variations of their target-date suites. Managed account providers are offering customized guidance and advice for the drawdown period. Employees of all ages want guidance and help.