PLANSPONSOR - February/March 2021 - 32

PLAN DESIGN | INVESTMENTS
Are
Annuities
Good
For All?
Sponsors should
consider each case
from every angle
F
or years, annuities have been
touted as the answer to retirees'
need for steady retirement income,
and, as of last year, thanks to the Setting
Every Community Up for Retirement
Enhancement (SECURE) Act's safe harbor
provision, plan sponsors may now
confidently offer them. But is this type of
investment appropriate for each retiree?
Ask Geoff Dietrich, founder of
ANNUA, which serves to connect retirement
plans and insurance companies. " I
think that, in general, an annuity makes
sense for most people. The only true way
to guarantee lifetime income is through
an annuity contract with an insurance
company. " However, he cautions, " this is
only a blanket statement; everything else
depends on a person's circumstances. "
The SECURE Act indeed did help,
" knocking down barriers to annuity adoption
that we found when talking to plan
sponsors, intermediaries and participants, "
Dietrich says. Now, conversation
about the products has increased, revealing
a need for education about what they are
and how they work.
Participant Circumstances
Kelli Hueler, founder and CEO of Hueler
Companies, an out-of-plan lifetime income
platform, in Eden Prairie, Minnesota, says
it is common for clients who are nearing, at
or in retirement to buy an annuity; generally,
they spend only a portion of their
savings for that purpose. As the Hueler
platform is an out-of-plan solution, people
may buy their annuity with pre-tax or aftertax
money from their defined contribution
(DC) plan; assets from an individual
retirement account (IRA); or money from a
savings account. This is especially helpful
for those who may have multiple retirement
plans or pools of assets.
" We try to keep a pulse on what
percentage of overall dollars people are
using to purchase their annuity. We typically
see no more than 20% to 25% of assets
32 PLANSPONSOR.COM February - March 2021 Art by Ryan Peltier
converted to guaranteed income, " she says.
When her firm calculates an individual's
resources and realizes he is attempting to
spend more than 50%, it puts a hold on the
transaction and requests more discussion.
" I think there are good ways to set up
annuity programs that take into account
an individual's much broader asset pool
and that put limits on what is annuitized, "
she says. " Individuals should annuitize
only what they need in income. They can
look at the sources of income they'll have
in retirement and see what they'll need, in
addition. People are comfortable with that
and can understand it; some may be more

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PLANSPONSOR - February/March 2021

Table of Contents for the Digital Edition of PLANSPONSOR - February/March 2021

Service for a Crowd
2020 PLANSPONSOR Best in Class 401(k) Plans
Shelter From a Storm
From Volatility to Stability
Are Annuities Good for All?
Regrowth Factor
When 'Herding' Helps
PLANSPONSOR - February/March 2021 - Cover1
PLANSPONSOR - February/March 2021 - Cover2
PLANSPONSOR - February/March 2021 - 1
PLANSPONSOR - February/March 2021 - 2
PLANSPONSOR - February/March 2021 - 3
PLANSPONSOR - February/March 2021 - 4
PLANSPONSOR - February/March 2021 - 5
PLANSPONSOR - February/March 2021 - 6
PLANSPONSOR - February/March 2021 - 7
PLANSPONSOR - February/March 2021 - 8
PLANSPONSOR - February/March 2021 - 9
PLANSPONSOR - February/March 2021 - 10
PLANSPONSOR - February/March 2021 - 11
PLANSPONSOR - February/March 2021 - 12
PLANSPONSOR - February/March 2021 - 13
PLANSPONSOR - February/March 2021 - Service for a Crowd
PLANSPONSOR - February/March 2021 - 15
PLANSPONSOR - February/March 2021 - 16
PLANSPONSOR - February/March 2021 - 17
PLANSPONSOR - February/March 2021 - 18
PLANSPONSOR - February/March 2021 - 19
PLANSPONSOR - February/March 2021 - 2020 PLANSPONSOR Best in Class 401(k) Plans
PLANSPONSOR - February/March 2021 - 21
PLANSPONSOR - February/March 2021 - 22
PLANSPONSOR - February/March 2021 - 23
PLANSPONSOR - February/March 2021 - 24
PLANSPONSOR - February/March 2021 - 25
PLANSPONSOR - February/March 2021 - Shelter From a Storm
PLANSPONSOR - February/March 2021 - 27
PLANSPONSOR - February/March 2021 - From Volatility to Stability
PLANSPONSOR - February/March 2021 - 29
PLANSPONSOR - February/March 2021 - 30
PLANSPONSOR - February/March 2021 - 31
PLANSPONSOR - February/March 2021 - Are Annuities Good for All?
PLANSPONSOR - February/March 2021 - 33
PLANSPONSOR - February/March 2021 - Regrowth Factor
PLANSPONSOR - February/March 2021 - 35
PLANSPONSOR - February/March 2021 - When 'Herding' Helps
PLANSPONSOR - February/March 2021 - 37
PLANSPONSOR - February/March 2021 - 38
PLANSPONSOR - February/March 2021 - 39
PLANSPONSOR - February/March 2021 - 40
PLANSPONSOR - February/March 2021 - Cover3
PLANSPONSOR - February/March 2021 - Cover4
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