Great-West Expands Tool Suite

Great-West Financial expanded its suite of retirement readiness products and services for plan sponsors and participants.

Great-West’s new tools include the Retirement Income Control Panel, 3(21) Fiduciary Services, Account Retirement Income Estimate on Physical Statements and the Retirement Readiness Report Card. The Report Card is planned to launch in the first quarter of 2013.

  • The Retirement Income Control Panel provides a tailor-made retirement strategy for savings targets and gives each individual a custom income plan for spending down his or her retirement savings;
  • 3(21) Fiduciary Services for new Employee Retirement Income Security Act (ERISA) 401(k) plans provides plan sponsors and their advisers with co-fiduciary protection in the selection and monitoring of a plan’s investment options;
  • Account Retirement Income Estimate on Physical Statements provides participants with an estimate of their monthly retirement income based on the accounts Great-West Financial recordkeeps for them; and
  • The Retirement Readiness Report Card for plan sponsors analyzes and reports on participants’ estimated retirement income levels versus participants’ target retirement income levels, then gives plan sponsors strategies for closing the gap.

The Retirement Income Control Panel automatically draws real-time participant account data from Great-West Financial’s recordkeeping system. The panel also analyzes information an individual enters about assets outside of his or her Great-West Financial retirement plan. Industry expert Ibbotson Associates Inc., part of the Morningstar Investment Management division, uses this custom data set to calculate the individual’s estimated monthly retirement income. The Retirement Income Control Panel then compares participants’ estimated retirement income with their target retirement income and highlights any gap between the estimated and target dollar amounts.

“Our clients told us they want employees to have an accurate picture of how much money they’re likely to have each month during retirement,” said Charles Nelson, president of Great-West Retirement Services. “They also said they want employees to have a spend-down strategy for their retirement savings. Our new Retirement Income Control Panel delivers on both of these requests.”

Using the spend-down plan in the Retirement Income Control Panel shows how much an individual can spend each year from their various retirement income accounts, Nelson said. It also can show how sources such as a 401(k), defined benefit plan, spouse’s 401(k), individual retirement account (IRA) and Social Security contribute to the participant’s potential spend-down strategy. “Understanding which account to spend down first and when to do it can be intimidating,” Nelson said.

The Retirement Income Control Panel and 3(21) Fiduciary Services for new plans join Great-West Financial’s current retirement readiness tools, managed accounts and multimanager, multi-glide path target-date funds (TDFs)the Great-West Lifetime Funds.

“Looking ahead, each participant’s fourth-quarter paper statement will include an estimate of their monthly retirement income based on the accounts we recordkeep for them,” Nelson said.

Nelson told PLANADVISER that a monthly retirement income estimate made more sense than yearly, based on how participants budget their monthly bills.

During the first quarter, Great-West will launch its Retirement Readiness Report Card, powered by Ibbotson. This analysis tool will help plan sponsors assess and monitor participants’ retirement readiness.

The Readiness Report Card will be a powerful tool for plan sponsors, David Blanchett, head of retirement research at Morningstar, told PLANADVISER. “If a plan sponsor wants to improve their plan, they need to know how,” he added.

The Report Card shows plan sponsors what percent of their participants are on the right track for retirement readiness and can compare demographics, Nelson said.

These new retirement readiness features will be available at no additional charge to plan sponsors or participants.