August 06, 2012
--- Embedding in-plan guaranteed retirement income options in defined
contribution (DC) plans is a key solution to improve DC plan
participants’ overall retirement preparedness, a white paper asserts. ---
“Better Participant Outcomes Through In-Plan Guaranteed
Retirement Income,” a white paper from Prudential Retirement, also says
these options help reduce pressure on employers that want employees to
retire on time and enjoy a more secure and satisfactory retirement.
Based on research data from a 2011 Prudential Retirement
Plan Participant Survey and an analysis of its 2011 Book of Business,
the white paper indicates American workers are concerned about a variety
of retirement risks, including market volatility, longevity, investment
performance, healthcare costs, inflation and the uncertainty of Social
Security. The white paper notes that more than half of those polled said
investing in in-plan guaranteed retirement income options helps make
them more prone to better weather market volatility.
The research also found that in-plan guaranteed retirement
income options made participants feel more prepared for retirement and
helped produce better retirement outcomes. In addition, many of those
who already invest in an in-plan guaranteed retirement income option
believe this is a good option as part of a default investment for
employees, provided they can opt-out if they choose.
The data showed “plan participants with in-plan guaranteed
retirement income options were better diversified and contributed 38%
more to their 401(k) plan than participants not invested in a guaranteed
income option,” said Jamie Kalamarides, senior vice president,
Institutional Investment Solutions at Prudential Retirement.
The white paper is here.