Lincoln Financial Group Launches ‘IRA Income Plus’ Annuity Rider

The optional living benefit rider is available within Lincoln variable annuities and is designed to help maximize income on qualified money.

Lincoln Financial Group has introduced the “Lincoln IRA Income Plus” optional benefit rider, designed to help owners of Lincoln variable annuities maximize their retirement income on qualified savings being drawn from individual retirement accounts (IRAs).

Lincoln IRA Income Plus is an optional benefit available with Lincoln variable annuities for an additional cost and is designed to help maximize retirement income earlier in retirement years, explains John Kennedy, head of retirement solutions distribution at Lincoln Financial Distributors.

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Explaining why the firm is offering this new product, Kennedy cites LIMRA Secure Retirement Institute research showing current retirees are often overly conservative about withdrawing from the assets they’ve saved. According to the research, four in 10 near-retirees are worried about running out of money. But at the same time, the data shows the majority of actual retirees take withdrawals from their tax-deferred savings only to satisfy their required minimum distributions (RMDs), the amount that must be withdrawn from qualified accounts once they reach age 70 1/2.

“Today’s retirees look to remain invested in the market, allowing their money to continue to grow. But at the same time, they look for protected income that an annuity with optional benefits can help provide,” says Brian Kroll, head of annuity solutions at Lincoln Financial Group. “This new benefit allows them to use a variable annuity with growth and income protection to better support their income needs in the early years of their retirement.”

Lincoln explains that variable annuities are long-term investment products that offer a lifetime income stream, options for guaranteed growth and income (available for an additional charge), and death benefit protection. They are subject to market fluctuation, investment risk, and possible loss of principal, and have unique fees and charges.

Specific features of the Lincoln IRA Income Plus include guaranteed growth for future income, as the income base increases annually by the greater of 6% simple or account value growth; two options for income starting at age 70 or later (single life only); and a dollar-for-dollar GOP death benefit.

More information about the new solution is available here.

Franklin Templeton to Pay Over $13 Million to Settle Self-Dealing Lawsuit

In addition, the company will select a non-proprietary target-date fund (TDF) for its 401(k) investment lineup and increase the company match contribution rate for three years.

Franklin Resources will pay $13,850,000 and make other provisions to settle a lawsuit alleging that defendants breached their Employee Retirement Income Security Act (ERISA) fiduciary duties by causing Franklin Templeton’s 401(k) plan to invest in funds offered and managed by Franklin Templeton when better-performing and lower-cost funds were available.

A month before the trial in the case was set to begin, the parties in the lawsuit announced they had reached a settlement but needed 60 days to file a motion for preliminary approval.

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According to the settlement agreement, in addition to the settlement payment, the fiduciaries to the plan with responsibility for selecting plan investment options will add a nonproprietary target-date fund option (TDF) to the investment lineup, which will be maintained as a plan investment option for the duration of the compliance period in addition to the plan’s qualified default investment alternative (QDIA)—the LifeSmart Target Date Funds. “The choice of TDF will be made by the fiduciaries responsible for selecting Plan investment options in a manner consistent with their fiduciary oversight responsibilities, following a search of nonproprietary TDF options conducted by the Plan’s independent investment consultant, Callan Associates, Inc.,” the settlement agreement says.

Also, Franklin has agreed to increase the company match contributions to the plan from a 75% company match rate to an 85% company match rate beginning with the first full quarter of participant deferrals following the effective date of the settlement agreement, for a period of three years.

The settlement agreement says the defendants do not admit any liability in the action, including that any of their prior or existing practices violate any federal or state laws, statutes or regulations.

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