PLANSPONSOR - September - October 2023 - 13

would permit the creation of a sidecar
account tied to a participant's retirement
account. The second provision would
permit participants to withdraw up to
$1,000 in a year from their retirement
account to pay for an emergency.
The ESI also suggested policy
changes to increase out-of-plan emergency
savings options, given that so many
of the bottom quartile of earners have no
Moreover,
interventions
that targeted
new employees
had greater
median uptake
rates, at 39%,
than did
projects that
targeted existing
employees or
members, at 8%.
employer retirement plan to save in.
" Public policy should further catalyze
the innovation for out-of-plan solutions
already happening in the private
sector, " the report says. " This includes
ensuring that savings options utilized
by people earning low income-such
as savings features on payroll cards or
standalone
savings
accounts-benefit
from future policy changes, [for instance]
allowing for similar automatic enrollment
into out-of-plan accounts. "
BlackRock's social impact team
launched the ESI in 2019. Nonprofits
Common Cents Lab, Commonwealth and
the Financial Health Network consulted
on the overall research. -Natalie Lin
ASK THE EXPERTS
Annuities Outside the Plan
QUESTION: We're a new church-plan sponsor that does not offer annuities
at all in our 403(b) plan, either as investment options or as a form of distribution.
May our participants still avail themselves of an annuity option in
retirement if they wish, or are they out of luck?
ANSWER: Your plan participants may absolutely avail themselves of an annuity option
in retirement, but, instead of purchasing that annuity in the plan, they would purchase
it outside the plan. There's a strong retail market for annuities, and participants will
generally have various options from which to choose. Although such retail annuities
may be more expensive than an annuity purchased in-plan, due to an institutional
plan's collective purchasing power, the annuity might be more easily tailored to the
participant's individual needs.
There are generally two ways to buy an annuity outside the plan: by rolling over an
eligible distribution to an individual retirement account or other retirement plan that
offers annuities as an investment option, or by taking a plan distribution and using the
proceeds to purchase an annuity benefit. Since annuities can be complicated, and not
everybody is a good candidate for one, the Experts urge anyone considering an annuity
to discuss this with a financial adviser well versed in such vehicles.
Kimberly Boberg, Taylor Costanzo, Kelly Geloneck and David Levine, with Groom
Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer
readers' questions. This is general information, does not constitute legal advice and
cannot be used or substituted for legal or tax advice. Have a question for the Experts?
Email Amy.Resnick@issmediasolutions.com with Ask the Experts as the subject.
TIDBITS
The Diminishing Trust
In the Fund
Americans who expect Social Security to provide them
a guaranteed source of income, by generation:
68%
Generation X
Ages 40 - 55
88%
Baby Boomers
Ages 56 - 77
93%
Retirees (5 - 15 years)
Ages 40 - 80
Source: Insured Retirement Institute, " Evolving Retirement Expectations Among
American Workers and Retirees "
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