TIAA-CREF Product Addresses Retiree Health Care Costs

TIAA-CREF has developed an offering that seeks to provide employees of nonprofit institutions a way to save during their working years for health care expenses in retirement.

The Retiree Health Care Savings Plan allows employers to set up defined-contribution style plans to which employees can contribute part of earnings, post-tax, to be used for health care costs in retirement. Employers have the option of contributing to the plan as well. Employer contributions and earnings are not taxable when used for medical expenses in retirement.

Doug Chittenden, vice president for institutional product management at TIAA-CREF, told PLANSPONSOR that the firm increasingly heard from clients of all types about the challenges in offering retired employees health care subsidies or benefits. Following a symposium in which the topic of retiree health care costs was discussed, TIAA-CREF decided the only solution is to start now and pre-fund for health care costs, and formed a task force that has been working on the solution for the past two years.

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The Retiree Health Care Savings Plan is a trust-structured solution where the plan sponsor is the owner of the trust, but the participants’ accounts are individually recordkept. The plan sponsor will decide investment options, and TIAA-CREF anticipates that most will allow participants to direct investments of their accounts. According to Chittenden, most clients currently looking at the program are eyeing lifecycle funds, but sponsors can choose any type of investment for their programs’ menu.

The plan will look similar to participants’ 403(b) accounts, and participants will be able to use TIAA-CREF’s Web site and other tools for account monitoring and management, Chittenden said. Once in retirement, participants will be able to use a debit card to access benefits at the point of service.

TIAA-CREF started the program for its own employees on January 1, and expects to offer it to about 15 more plan sponsor clients this year. Chittenden said the program will be offered across all client institutions next year.


 

Employers interested in the Retiree Health Care Savings Plan can find out more from a TIAA-CREF representative or by calling 888.842.7782. The firm will be putting information about the program on its Web site soon.

 

Symmetra Offers New Program for K-12 403(b) Sponsors

Symetra Financial unveiled its Savings for Schools program designed to advance retirement preparedness among K-12 school teachers and educators.

A news release said the program focuses on providing 403(b) plan tools, education, and resources to help school districts offer savings solutions. The new program also features a new Web site, where districts can access a variety of online resources designed to help guide them through the 403(b) planning process, according to the announcement.

The Web site’s “ABCs of 403(b)s” section includes information about navigating new regulations, Frequently Asked Questions with answers to some of the most common participant inquiries, tips for streamlining plan administration, and other plan content.

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“We are intently focused on helping America’s teachers and educators achieve the retirement they deserve,” said Al Close, senior vice president of General Agency and Advisor distribution at Symetra, in the announcement. “Savings for Schools reflects our long-standing commitment to making a positive difference in public education and builds on our proud legacy in the 403(b) market.”

Symetra manages 403(b) and tax-sheltered account plans on behalf of schools across the country.

More information is available here.

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