PLANSPONSOR - September - October 2023 - 15

participants, " he says, adding this is something
the industry needs to address.
Participants who use systematic
withdrawals also face potential pitfalls.
Ryan points to an important distinction:
" There's a discrepancy between when
people think about retirement income and
lifetime income, " meaning without careful
management, the SWP's paychecks can
dry up faster than the retiree expects.
This is not the set-it-and-forget-it
investing the participant may be used to.
" Erroneous assumptions regarding rates
of return or inflation can be hazardous to
any portfolio, " notes Steven P. Orlowski,
writing about systematic withdrawals for
Investopedia.com. " Also, mismanagement
or neglect alone can ruin the bestlaid
plan. The prospects of eroding [one's]
portfolio are high. "
Kerry Bandow, head of defined contribution
solutions at Russell Investments,
however, concurs with O'Connor that the
feature is needed. " We still find DC plans
in which the only choice for distributions
is lump-sum, so updating the plan document
to allow for at least periodic distributions
through
retirement
step. " -Karen Wittwer
is a first
TIDBITS
Beneath the Shiny Surface
While 94% of employees said they like the
concept of guaranteed income for life, 92%
didn't like the idea of " locking it in " ; 92% didn't
like being unable to access more than agreed
upon if needed; and 79% didn't like the loss of
control over how the money would be invested.
Source: Invesco, " Show Me the Income "
How Secure a Stream?
Over one-third of participants could run out
of money in retirement, according to a survey.
When asked how much they could withdraw
annually from their assets of $500,000 if they
retired at age 65, 57% of respondents said 7%
or more, and almost one-third said 10% or more.
Source: AB, " Inside the Minds of Plan Participants "
Simplicity Leads the List
In two recent surveys, defined contribution investment advisers/consultants and DC plan sponsors,
respectively, were asked to rate possible retirement income products and features, on a scale of 1 to 4,
least to most appealing.
DC Investment
Top 5 Plan Distribution Options
1) Simple systematic withdrawals
2) Managed account with income-planning feature
3) Target-date investment with managed payout feature (noninsured)
4) Investment option with managed payout feature
5) Target-date investment with embedded annuity feature
Source: T. Rowe Price, " Implementing an In-Plan Retirement Income Solution "
Advisers/Consultants DC Plan Sponsors
3.4
2.9
2.6
2.5
2.5
2.9
2.6
2.7
2.2
2.6
PLANSPONSOR.COM September - October 2023 15

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PLANSPONSOR - September - October 2023

Table of Contents for the Digital Edition of PLANSPONSOR - September - October 2023

INSIGHTS
PARTICIPANT ANALYSIS
RULES & REGULATIONS
UPFRONT
Building Strength
2023 Defined Benefit Administration Survey
2023 Best in Class 401(k) Plans
If the Goal Is Engagement
Upgrading NQDC Plans
When to Amend?
PRTs’ New Notoriety
Continuous Improvement
PLANSPONSOR - September - October 2023 - Cover1
PLANSPONSOR - September - October 2023 - FC1
PLANSPONSOR - September - October 2023 - FC2
PLANSPONSOR - September - October 2023 - Cover2
PLANSPONSOR - September - October 2023 - 1
PLANSPONSOR - September - October 2023 - INSIGHTS
PLANSPONSOR - September - October 2023 - 3
PLANSPONSOR - September - October 2023 - PARTICIPANT ANALYSIS
PLANSPONSOR - September - October 2023 - 5
PLANSPONSOR - September - October 2023 - RULES & REGULATIONS
PLANSPONSOR - September - October 2023 - 7
PLANSPONSOR - September - October 2023 - 8
PLANSPONSOR - September - October 2023 - 9
PLANSPONSOR - September - October 2023 - UPFRONT
PLANSPONSOR - September - October 2023 - 11
PLANSPONSOR - September - October 2023 - 12
PLANSPONSOR - September - October 2023 - 13
PLANSPONSOR - September - October 2023 - 14
PLANSPONSOR - September - October 2023 - 15
PLANSPONSOR - September - October 2023 - Building Strength
PLANSPONSOR - September - October 2023 - 17
PLANSPONSOR - September - October 2023 - 18
PLANSPONSOR - September - October 2023 - 19
PLANSPONSOR - September - October 2023 - 2023 Defined Benefit Administration Survey
PLANSPONSOR - September - October 2023 - 21
PLANSPONSOR - September - October 2023 - 22
PLANSPONSOR - September - October 2023 - 23
PLANSPONSOR - September - October 2023 - 2023 Best in Class 401(k) Plans
PLANSPONSOR - September - October 2023 - 25
PLANSPONSOR - September - October 2023 - 26
PLANSPONSOR - September - October 2023 - 27
PLANSPONSOR - September - October 2023 - 28
PLANSPONSOR - September - October 2023 - 29
PLANSPONSOR - September - October 2023 - 30
PLANSPONSOR - September - October 2023 - 31
PLANSPONSOR - September - October 2023 - If the Goal Is Engagement
PLANSPONSOR - September - October 2023 - 33
PLANSPONSOR - September - October 2023 - 34
PLANSPONSOR - September - October 2023 - 35
PLANSPONSOR - September - October 2023 - Upgrading NQDC Plans
PLANSPONSOR - September - October 2023 - 37
PLANSPONSOR - September - October 2023 - When to Amend?
PLANSPONSOR - September - October 2023 - PRTs’ New Notoriety
PLANSPONSOR - September - October 2023 - Continuous Improvement
PLANSPONSOR - September - October 2023 - Cover3
PLANSPONSOR - September - October 2023 - Cover4
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