PLANSPONSOR - May/June 2024 - 22

FEATURE
MASTERING
IN-PLAN
ANNUITIES
The fiduciary guidance plan sponsors
need to follow a prudent process
F
or plan committees that have started to contemplate
adopting an in-plan retirement income product, the fiduciary
differences are in the details.
" It's not as though there's an inherently different fiduciary
process that applies to lifetime income products, " says Bradford
Campbell, a partner in law firm Faegre Drinker Biddle & Reath
LLP in Washington.
" The fiduciary obligation is the same, " he says. " Fiduciaries
need to consider all of the relevant factors and then make a prudent
decision. The process is pretty much the same structure as fiduciaries
use for other investments. What differs are some of the
individual inputs. " Unlike with mutual funds, for example, with
annuities the insurer's ongoing solvency is a key factor to consider,
since these are inherently long-term investments.
Here, Campbell and four other experts outline a prudent
process that plan committees can follow when considering
adding a retirement income product to their plan.
The Preparation Phase
While the fiduciary process when exploring annuities is similar
to the one used with other investments, retirement income
22 PLANSPONSOR.COM May - June 2024 Art by Julien Posture
options require some considerations distinct to selecting an
insurance product, says Tom Roberts, a principal in Groom Law
Group, Chartered, in Washington. Since it issued an Interpretive
Bulletin on annuity selection in 1995, the Department of Labor
has consistently expressed that choosing an in-plan insurance
product demands extra due diligence, he says.
" Fortunately, many of sponsors' questions about procedures
were addressed in the safe harbor that came with the SECURE
[Setting Every Community Up for Retirement Enhancement] Act
1.0 [of 2019], " Roberts says. " SECURE 1.0's safe harbor dramatically
reduces the burden that would otherwise fall on a plan sponsor's
shoulders with respect to looking into the financial viability
of the insurance company. "
Campbell says the safe harbor is " a clear, objective test " ;
it calls for a list of disclosures, which a plan fiduciary must get
initially from the provider of any guaranteed retirement income
contract it is considering and then annually once the GRIC is
in place. " As long as you get those disclosures, the fiduciary
will have a safe harbor for the selection [and monitoring] of the
annuity provider, " he says. " As a fiduciary, you need to be aware
of this safe harbor and what its conditions are, so you can make
MASTERING
IN-PLAN
ANNUITIES
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PLANSPONSOR - May/June 2024

Table of Contents for the Digital Edition of PLANSPONSOR - May/June 2024

Insights
The Proactive Adviser
Mastering the In-Plan Annuities
2024 Plan Sponsor of the Year Finalists
Why a Second Committee?
Savings Need to Last
DOL Finalizes QPAM Exemption
Filing a VFC Application?
Careful Consideration
PLANSPONSOR - May/June 2024 - Cover1
PLANSPONSOR - May/June 2024 - FC1
PLANSPONSOR - May/June 2024 - FC2
PLANSPONSOR - May/June 2024 - Cover2
PLANSPONSOR - May/June 2024 - 1
PLANSPONSOR - May/June 2024 - Insights
PLANSPONSOR - May/June 2024 - 3
PLANSPONSOR - May/June 2024 - 4
PLANSPONSOR - May/June 2024 - 5
PLANSPONSOR - May/June 2024 - 6
PLANSPONSOR - May/June 2024 - 7
PLANSPONSOR - May/June 2024 - 8
PLANSPONSOR - May/June 2024 - 9
PLANSPONSOR - May/June 2024 - 10
PLANSPONSOR - May/June 2024 - 11
PLANSPONSOR - May/June 2024 - 12
PLANSPONSOR - May/June 2024 - 13
PLANSPONSOR - May/June 2024 - 14
PLANSPONSOR - May/June 2024 - 15
PLANSPONSOR - May/June 2024 - 16
PLANSPONSOR - May/June 2024 - 17
PLANSPONSOR - May/June 2024 - The Proactive Adviser
PLANSPONSOR - May/June 2024 - 19
PLANSPONSOR - May/June 2024 - 20
PLANSPONSOR - May/June 2024 - 21
PLANSPONSOR - May/June 2024 - Mastering the In-Plan Annuities
PLANSPONSOR - May/June 2024 - 23
PLANSPONSOR - May/June 2024 - 24
PLANSPONSOR - May/June 2024 - 25
PLANSPONSOR - May/June 2024 - 2024 Plan Sponsor of the Year Finalists
PLANSPONSOR - May/June 2024 - 27
PLANSPONSOR - May/June 2024 - 28
PLANSPONSOR - May/June 2024 - 29
PLANSPONSOR - May/June 2024 - 30
PLANSPONSOR - May/June 2024 - 31
PLANSPONSOR - May/June 2024 - 32
PLANSPONSOR - May/June 2024 - 33
PLANSPONSOR - May/June 2024 - Why a Second Committee?
PLANSPONSOR - May/June 2024 - 35
PLANSPONSOR - May/June 2024 - Savings Need to Last
PLANSPONSOR - May/June 2024 - 37
PLANSPONSOR - May/June 2024 - DOL Finalizes QPAM Exemption
PLANSPONSOR - May/June 2024 - Filing a VFC Application?
PLANSPONSOR - May/June 2024 - Careful Consideration
PLANSPONSOR - May/June 2024 - Cover3
PLANSPONSOR - May/June 2024 - Cover4
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