Products November 8, 2021

OneAmerica Launches Retirement Plan Offering As Alternative to PEPs

OneConnect is a multiple employer approach that is available to businesses that want to sponsor ERISA 403(b) and 457 plans as well as to those who want to offer a 401(k).

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OneAmerica has introduced OneConnect, a retirement plan solution that it says will ease administration for businesses and provide the scale that comes with a pooled or multiple employer approach, but with greater simplicity.

The solution features flexible plan design and streamlined fiduciary oversight.

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OneAmerica notes that the Setting Every Community Up for Retirement Enhancement (SECURE) Act included a provision that allowed for the creation of pooled employer plans (PEPs) for multiple, unrelated employers. However, it explains, the legislation mandates the involvement of up to four financial professionals: an Employee Retirement Income Security Act (ERISA) 3(16) fiduciary to keep the plans compliant with federal laws; a third-party trustee that is responsible for contribution collections; a pooled plan provider (PPP); and a separate 3(21) or 3(38) fiduciary responsible for plan investments.

OneConnect by OneAmerica simplifies this approach by allowing the plan’s adviser to act in the 3(21) or 3(38) capacity, while OneAmerica functions in the 3(16) role. Furthermore, while the PEP provision of the SECURE Act only pertained to 401(k) plans, OneConnect is available to tax-exempt employers that would offer an ERISA 403(b) or 457 plan.

“For employers, providing a robust retirement plan is no longer just a ‘nice-to-have’ to recruit talent. It’s increasingly a ‘must have’—a crucial aspect of a value-add benefit package,” says Steven Kofkoff, vice president, retirement services strategy, product management and practice leadership at OneAmerica. “But doing so adds complexities to employers’ workload. All too often, retirement plan administrators find themselves lacking the time and expertise to manage the daily administrative operations of a retirement plan. Our approach takes that task off their hands while allowing plan sponsors to retain ultimate ownership of a valuable talent recruiting and retention tool.”

OneAmerica provides the following 3(16) administrative fiduciary services for new clients or those wanting to restructure:

  • Plan interpretation and discretion;
  • Eligibility determination;
  • Vesting calculations;
  • Form 5500 government filings and signing (optional);
  • Rollover contributions;
  • Hardship withdrawals;
  • Termination, in-service and required minimum distributions (RMDs);
  • Mandatory cash outs;
  • 1099 tax reporting;
  • Beneficiary tracking;
  • Qualified domestic relations orders (QDROs);
  • Nondiscrimination testing;
  • Loan administration;
  • Participant notice mailings; and
  • Fee disclosures.
For more information about OneConnect, plan sponsors can contact their financial professional or OneAmerica representative, or download a white paper at https://sforce.co/2ZnEm14.
Data & Research November 5, 2021

Long-Term Care Concerns Dog Older Workers and Retirees

Those that enter retirement married have the most resources to handle care needs, while women who are unmarried have the least, according to a new survey.

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The potential need for long-term care services and support can be a significant source of anxiety for older workers, retirees and their families. A recent study from the Center for Retirement Research (CRR) at Boston College looked at whether retirees who are 65 and older will have the support they need without exhausting their financial resources and family caregivers.

The report found that only about 26% of retirees can cover severe care needs for at least five years using income, financial assets and informal caregivers. To determine what levels of care a retiree could need, the study looked at total care hours required, the amount of unpaid care that a family or friend could provide, the amount of care that can be purchased, and the combination of family care and financial resources.

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On the most challenged end, 27% of retirees cannot afford even the most minimal of care needs, while 22% could cover minimal care. In the middle, 25% seem able to afford moderate care, according to the study. The survey notes that providing care, especially high-intensity care over long periods, can have negative effects on the physical and emotional health of caregivers, and individuals might not be willing to deplete their entire financial reserves, leaving no buffer for emergencies.

Those who enter retirement married have the most resources to handle care needs, while women who are unmarried have the least. Only 31% of those who are married are unable to cover the most minimal levels of care. That number goes up slightly to 33% for unmarried men and jumps to 56% for unmarried women.

Clear patterns also exist when screening survey respondents by education level, which the CRR says can sometimes be a good poxy for income. Those with less than a high school diploma will have the least resources for severe long-term services and support, the study found, as only 13% would have enough to cover moderate to severe costs. For those with a high school diploma, that number increases to 33%. For those with some college education, the figure increases to 47%, while 71% of those with a college degree or higher will have enough resources for moderate to severe care.

Race and ethnicity also impact what percent of retirees have enough resources. Only 5% of Black and Hispanic individuals can cover severe care, behind 25% for white retirees. However, a much higher share of Hispanic individuals—64%—end up in the group that cannot cover even a year of care, compared with 49% of Black retirees and 32% of white retirees.

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