A new generation of guaranteed and non-guaranteed income products, strategies and solutions offered as part of a 401(k) plan allows employers to ease the burden of their employees by helping to ensure that their nest egg lasts as long as they do. This essentially helps plan participants create their own “personal pension.”
Industry research points to a growing interest by plan participants in having their employer provide retirement-income products and solutions. Although some plan sponsors have made retirement income available as part of their defined contribution plan, many have remained on the sideline to see how the retirement income market develops and evolves. Therefore, a primary focus of the IRIC is to educate plan sponsors and their consultants about the range of products and solutions that are available in the institutional marketplace. By raising market awareness, providing a framework and creating evaluation tools so that products can be easily understood, the IRIC will make it easier for plans sponsors and their consultants to select the most appropriate solutions for plan participants.
Carrying out fiduciary duties when adding a guaranteed retirement income option to a DC plan is indeed a new process for plan sponsors and their advisors. To help advisors and sponsors better understand the fiduciary process as it applies to the integration or addition of guaranteed income into a defined contribution plan, IRIC members have crafted a white paper and fiduciary checklist for guaranteed products. In this paper, ERISA attorneys and / OR IRIC members Fred Reish, Bruce Ashton and Martin Schmidt discuss the legal standards governing a fiduciary’s decision as well as practical tools to help evaluate the claims paying ability of an insurer when offering an insured retirement income product, particularly in choosing the insurance carrier that offers the feature.
A grid summarizing the different product types, a high-level description, nature of the income generated, fee structure, and a list of product manufacturers. It helps consultants and plan sponsors gain an understanding of the different types of institutional retirement income products currently available in the marketplace.