September 17, 2012
--- Discussions about retirement income offer a chance to get plan sponsors and participants thinking about a holistic retirement solution, according to Ralph Ferraro, EVP, head of product development – corporate management at ING U.S. Retirement. ---
“Participants just can’t envision 20 years, or more, from now,” Bill Marshall, VP, senior product director of AllianceBernstein Defined Contribution Investments, told attendees at the 2012 PLANADVISER National Conference. He said if plan sponsors and participants simply want to address longevity risk, there are products available for that, but to address the retirement savings problem, retirement income solutions need to be in-plan default options.
AllianceBernstein developed an integrated solution to help participants understand longevity risk and know how to manage it. They partnered with United Technologies, the first company to use a guaranteed income product as its retirement plan default investment (see “Default Investment Option Addresses Longevity Risk”).
Ferraro said ING offers a similar product that looks just like a regular target-date fund for the youngest participants, but at 17 years from retirement starts methodically and automatically moving participants’ assets into guaranteed products. Five years out from retirement, 100% of assets are in guaranteed products.