Happy Friday, readers! Spend even a little time working in the retirement plan services industry and one will see that complexity is an inherent characteristic of the marketplace. This is particularly true when it comes to solving the “decumulation challenge.” Simply put, helping plan participants turn a lump sum of cash savings into a sustainable retirement income stream is hard. Participants want the safety of a guarantee, but they fear the lack of liquidity associated with annuitization. Fortunately, new products and strategies are emerging that may help participants access the income protection they want while also providing a greater degree of flexibility.
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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According to Willis Towers Watson, just over 80% of organizations acknowledge the importance of their older workers and managing the retirement process; however, only about half believe they understand the process well, and just one-quarter feel they have found an effective approach.
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Though retirement plans can allow individuals to self-certify that they qualify for a penalty-free coronavirus-related distribution, should the IRS discover otherwise during a future audit, a participant can be subject to substantial penalties.