PLANSPONSOR - December 2021 - January 2022 - 34
2022 INNOVATION ISSUE | ANNUITIES
Annuities Still Misunderstood
In today's low interest rate environment, these vehicles are gaining traction
T
here has been a general distrust of
annuities, notes Professor Michael
Finke of The American College of
Financial Services, but these products
are a way to pool investments to compensate
for not knowing how long a person
will live; they also address sequence-ofreturn
(SOR) risk.
And they are worth more plan
sponsor attention as investments for
defined contribution (DC) plans for two
more reasons, he says. First, the Setting
Every Community Up for Retirement
Enhancement (SECURE) Act of 2019
offered sponsors a clarified safe harbor for
annuity provider selection and, second,
persistent low interest rates, which have
bolstered the idea of replacing bonds with
annuities in retirement portfolios.
Despite this, sponsors have been
slow to jump on the annuity bandwagon,
and the distrust remains.
Misunderstandings of how annuities
work prevail. David Lau, founder
and CEO of DPL Financial Partners in
Louisville, Kentucky, says the myth that
assets will be locked up if an investor
purchases an annuity is not always true;
with a fixed-income annuity, investors
have access to their balance until all
assets are paid out.
A 2021 BlackRock DC Pulse Survey
found that 89% of participants are interested
in owning a product designed to
generate retirement income, and almost
nine in 10 said guaranteed income in
retirement would have a positive impact
on their financial well-being. Ninety-six
percent of those surveyed said they
have a sense of responsibility for their
employees' retirement readiness and
general financial well-being, and 68%
said helping participants with retirement
income has become even more
important to them due to the pandemic.
34 PLANSPONSOR.COM December 2021 - January 2022 Art by James Yang
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PLANSPONSOR - December 2021 - January 2022
Table of Contents for the Digital Edition of PLANSPONSOR - December 2021 - January 2022
INSIGHTS
RULES & REGULATIONS
UPFRONT
ESG Interest Piqued
2021 Best in Class DC Providers
Ramping Up Offerings
Annuities Still Misunderstood
Student Loan Repayment
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover1
PLANSPONSOR - December 2021 - January 2022 - Cover2
PLANSPONSOR - December 2021 - January 2022 - 1
PLANSPONSOR - December 2021 - January 2022 - 2
PLANSPONSOR - December 2021 - January 2022 - 3
PLANSPONSOR - December 2021 - January 2022 - INSIGHTS
PLANSPONSOR - December 2021 - January 2022 - 5
PLANSPONSOR - December 2021 - January 2022 - RULES & REGULATIONS
PLANSPONSOR - December 2021 - January 2022 - 7
PLANSPONSOR - December 2021 - January 2022 - 8
PLANSPONSOR - December 2021 - January 2022 - 9
PLANSPONSOR - December 2021 - January 2022 - UPFRONT
PLANSPONSOR - December 2021 - January 2022 - 11
PLANSPONSOR - December 2021 - January 2022 - 12
PLANSPONSOR - December 2021 - January 2022 - 13
PLANSPONSOR - December 2021 - January 2022 - 14
PLANSPONSOR - December 2021 - January 2022 - 15
PLANSPONSOR - December 2021 - January 2022 - ESG Interest Piqued
PLANSPONSOR - December 2021 - January 2022 - 17
PLANSPONSOR - December 2021 - January 2022 - 18
PLANSPONSOR - December 2021 - January 2022 - 19
PLANSPONSOR - December 2021 - January 2022 - 2021 Best in Class DC Providers
PLANSPONSOR - December 2021 - January 2022 - 21
PLANSPONSOR - December 2021 - January 2022 - 22
PLANSPONSOR - December 2021 - January 2022 - 23
PLANSPONSOR - December 2021 - January 2022 - 24
PLANSPONSOR - December 2021 - January 2022 - 25
PLANSPONSOR - December 2021 - January 2022 - 26
PLANSPONSOR - December 2021 - January 2022 - 27
PLANSPONSOR - December 2021 - January 2022 - 28
PLANSPONSOR - December 2021 - January 2022 - 29
PLANSPONSOR - December 2021 - January 2022 - Ramping Up Offerings
PLANSPONSOR - December 2021 - January 2022 - 31
PLANSPONSOR - December 2021 - January 2022 - 32
PLANSPONSOR - December 2021 - January 2022 - 33
PLANSPONSOR - December 2021 - January 2022 - Annuities Still Misunderstood
PLANSPONSOR - December 2021 - January 2022 - 35
PLANSPONSOR - December 2021 - January 2022 - Student Loan Repayment
PLANSPONSOR - December 2021 - January 2022 - 37
PLANSPONSOR - December 2021 - January 2022 - FIDUCIARY FORUM
PLANSPONSOR - December 2021 - January 2022 - INSIDE ANGLE
PLANSPONSOR - December 2021 - January 2022 - PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover3
PLANSPONSOR - December 2021 - January 2022 - Cover4
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