PLANSPONSOR - January - February 2024 - 22
A
FEATURE
on
t has been more than four years
since the Setting Every Community
Up for Retirement Enhancement
Act passed, expanding the safe harbor
for in-plan annuities and making it easier
for plans to offer lifetime income to
participants. Yet, while providers have
increased their offerings, sponsors are
much slower to adopt them.
Advisers and industry experts
say plan sponsors increasingly ask
questions about the vehicles but tend to stall there.
" We've probably doubled the amount of conversations
we've had with plan sponsors, consultants and recordkeepers
about in-plan annuities, " says Phil Maffei, managing director
for corporate retirement income products at TIAA in Waxhaw,
North Carolina. Most have been inquiries, " and the tenor has
certainly changed, " he says.
Many sponsors are reluctant to take the next step, though,
and introduce guaranteed income options within their plans. The
hesitation has many causes, experts say, including concerns about
portability and costs, a desire to wait until the market matures and
confusion about how various in-plan annuities might work.
Research shows that incorporating guaranteed income into a
retirement plan can ultimately enable retirees to spend more and
22 PLANSPONSOR.COM January - February 2024
Art by Tilda Rose
FOCUS
GUARANTEED INCOME
I
Plan sponsors have
several options
for providing
workers with
access to annuities
worry less about running out of money,
says Michael Finke, a professor of
wealth management at The American
College of Financial Services. But there
is a disconnect between that optimal
approach and the one most people take
when it comes to retirement income.
Annuities are the most efficient
method of guaranteeing income in
retirement because they allow for
pooling of longevity risk-i.e., the risk
that people will outlive their retirement savings. " The average
retirees should not bear the risk of not knowing how long they're
going to live, " Finke says.
Different Approaches
Hurdles for many plan sponsors are the perceptions that annuities
are relatively complex products with a score of nuances
between the different types of guaranteed income products.
" This is one of those areas where retail adoption may work far
more quickly than it will in the defined contribution space, " Finke
says. " Once you enter the ERISA [Employee Retirement Income
Security Act] world, caution becomes the name of the game. The
consultants and recordkeepers will be incredibly important when
it comes to the adoption of guaranteed income within plans. "
F
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PLANSPONSOR - January - February 2024
Table of Contents for the Digital Edition of PLANSPONSOR - January - February 2024
INSIGHTS
PARTICIPANT ANALYSIS
RULES & REGULATIONS
UPFRONT
What’s Around the Corner?
A Focus on Guaranteed Income
Navigating ESG
Are You on Track?
Demographic Shifts
Advice on Advice
Fiduciary Best Practices
2 Distinct Roles for When Sponsors Act
The DOL’s Not-So-New Fiduciary Rule
Continuous Good Service
PLANSPONSOR - January - February 2024 - Cover1
PLANSPONSOR - January - February 2024 - INSIGHTS
PLANSPONSOR - January - February 2024 - 1
PLANSPONSOR - January - February 2024 - 2
PLANSPONSOR - January - February 2024 - 3
PLANSPONSOR - January - February 2024 - PARTICIPANT ANALYSIS
PLANSPONSOR - January - February 2024 - 5
PLANSPONSOR - January - February 2024 - RULES & REGULATIONS
PLANSPONSOR - January - February 2024 - 7
PLANSPONSOR - January - February 2024 - 8
PLANSPONSOR - January - February 2024 - 9
PLANSPONSOR - January - February 2024 - UPFRONT
PLANSPONSOR - January - February 2024 - 11
PLANSPONSOR - January - February 2024 - 12
PLANSPONSOR - January - February 2024 - 13
PLANSPONSOR - January - February 2024 - 14
PLANSPONSOR - January - February 2024 - 15
PLANSPONSOR - January - February 2024 - What’s Around the Corner?
PLANSPONSOR - January - February 2024 - 17
PLANSPONSOR - January - February 2024 - 18
PLANSPONSOR - January - February 2024 - 19
PLANSPONSOR - January - February 2024 - 20
PLANSPONSOR - January - February 2024 - 21
PLANSPONSOR - January - February 2024 - A Focus on Guaranteed Income
PLANSPONSOR - January - February 2024 - 23
PLANSPONSOR - January - February 2024 - 24
PLANSPONSOR - January - February 2024 - 25
PLANSPONSOR - January - February 2024 - 26
PLANSPONSOR - January - February 2024 - 27
PLANSPONSOR - January - February 2024 - Navigating ESG
PLANSPONSOR - January - February 2024 - 29
PLANSPONSOR - January - February 2024 - Are You on Track?
PLANSPONSOR - January - February 2024 - 31
PLANSPONSOR - January - February 2024 - Demographic Shifts
PLANSPONSOR - January - February 2024 - Advice on Advice
PLANSPONSOR - January - February 2024 - 34
PLANSPONSOR - January - February 2024 - 35
PLANSPONSOR - January - February 2024 - Fiduciary Best Practices
PLANSPONSOR - January - February 2024 - 37
PLANSPONSOR - January - February 2024 - 2 Distinct Roles for When Sponsors Act
PLANSPONSOR - January - February 2024 - The DOL’s Not-So-New Fiduciary Rule
PLANSPONSOR - January - February 2024 - Continuous Good Service
PLANSPONSOR - January - February 2024 - Cover3
PLANSPONSOR - January - February 2024 - Cover4
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