Data & Research February 1, 2013

Guaranteed Income Options for DC Plans

A study pinpoints guaranteed lifetime income options offered within defined contribution (DC) plans as an opportunity to address retirement security challenges.
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The study report from the Insured Retirement Institute (IRI) indicates workers who convert a portion of their accumulated assets into a guaranteed income stream can effectively manage many of the risks inherent to the DC retirement system, such as longevity risk, volatility and sequence of returns risk, as well as excess withdrawal risk.  

IRI research shows Baby Boomers value guarantees, and the value of those guarantees increases with age.  Among Boomers ages 60 to 66, 19% stated the most important trait of a retirement product is guaranteed income each month, as do more than 15% of Boomers ages 55 to 59 and 14% of Boomers ages 50 to 54. Research from IRI and Cogent Research shows annuity owners are increasingly more likely to agree that annuities are a critical part of a retirement strategy, increasing by 18 percentage points from 55% in 2011 to 73% in 2012.  

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Using its own research, supplemented with other retirement industry research, the IRI study report discusses the advantages and challenges of in-plan guaranteed options.  

The report, “Guaranteed Lifetime Income Options within Employment-Based Plans,” is here.

Products February 1, 2013

Natixis Offers Retirement Plans New Share Class

Natixis Global Asset Management (NGAM) is offering “Class N” shares for several Natixis and Loomis Sayles funds.
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Class N shares have a number of distinctive characteristics:  

  • There are no front-end or back-end sales charges; 
  • There are no 12b-1 or service fees and no sub-transfer agency fees; and  
  • There is no minimum initial or subsequent investment amount for these shares.  

    Designed primarily for employer-sponsored retirement plans, Class N shares are not available for purchase by individual investors, traditional or Roth IRAs, retail nonretirement accounts or 529 College Savings Plans.  

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    “NGAM’s new Class N shares are a direct response to frequent requests from sponsors, consultants and platforms seeking lower-cost actively managed funds for their retirement participants,” said Matthew Coldren, executive vice president of the Client Solutions Group at Natixis Global Asset Management – U.S. Distribution. “N shares can impact a retirement participant’s long-term account balances, better positioning them to achieve retirement readiness.”   

    Visit http://www.ngam.natixis.com for more information.

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