The company says the product simplifies income planning for plan participants; they can purchase “income shares” that provide $10 of guaranteed monthly income for life. That means 50 income shares would provide $500 a month.
The cost of each income share varies with the plan participant’s age and current interest rates, and is predicated on retirement at age 65. The amount of income from each unit can increase if the participant retires later or can decrease if the participant retires earlier. Retirement plan participants can invest in Hartford Lifetime Income through regular payroll deductions or lump-sum payments.
In addition, The Hartford created the income shares to be portable, which means that a plan participant can retain the shares and the guaranteed income they provide if he or she changes employers, or the plan sponsor changes providers or recordkeepers.
Hartford Lifetime Income is a fixed deferred annuity imbedded as an investment option within 401(k) plans, which means it is not affected by volatility in the equity markets. The investment option is also included in the Fiduciary Assure program, an optional, third-party co-fiduciary service provided by Mesirow Financial at no additional cost. Guarantees are based on the claims-paying ability of Hartford Life Insurance Company.
Hartford Lifetime Income is initially available to retirement plan sponsors newly contracted with The Hartford and their plan participants.