Happy Friday, readers! It’s a common saying in the retirement plan industry that the back-end of the savings effort (i.e., spending down accumulated assets in a sustainable and efficient way) is far more complicated than the accumulation effort. This is because plan participants all have different longevity expectations, different beliefs about how they would like to live in retirement, and different conclusions about how to weigh longevity risk versus the risk of under-consumption. Making matters even more difficult, survey data shows that plan sponsors are not necessarily thinking strictly about annuities when contemplating the addition of an in-plan retirement income option. Despite this, recordkeepers and asset managers most commonly point to an annuity-based product as being top-of-mind for plan sponsor clients. Will 2019 deliver greater clarity on this vexing topic?
According to Cerulli research, the various parties involved in the implementation of an in-plan retirement income solution are often not on the same page about basic terminology and definitions.
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The department believes an oversight bureau, created to assess the financial strength of annuity providers, would help employers and advisers become more comfortable including annuities in retirement plans.
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Nearly all of those who work with an adviser feel they have prepared themselves well for estimating their monthly income needs in retirement, Voya Financial learned in a survey.
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The proposal is intended to help investors better understand these contracts’ features, fees and risks, and to more easily find the information needed to make an informed investment decision.
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Variable annuities continue to face challenges in the wake of transaction processing disruptions caused by the now-vacated DOL fiduciary rule; however, experts anticipate sales to recover as business processes normalize and newer product types come to market.
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MassMutual says a married couple that lives into their 90s but decides to begin their Social Security benefits at age 62 as opposed to age 70 could be leaving as much as half a million dollars on the table, or forfeiting $2,000 to $4,000 a month for life.
With the passage of the SECURE Act by the House of Representatives, experts tell PLANADVISER they are optimistic that agreement will be reached with the Senate during this Congress, but the many supporters of retirement reform will have to wait and see how compromise might be reached.
Besides a lengthy Finance Committee hearing discussing the popular RESA legislation, the day on Capitol Hill also brought news of the introduction of the new Retirement Security and Savings Act.
One retirement industry executive says she believes the Senate could act quite quickly in taking up the SECURE Act, which just passed the House of Representatives with a practically unanimous yea vote.
