Products January 11, 2018

Participants Can Build Spending Plan With Financial Soundings Solution

As the firm explains, the program begins with a baseline retiree analysis proactively delivered to each plan participant flagged as retired, and includes a personalized investment strategy recommendation in tandem with a monthly spending guide for their qualified plan assets.

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The enhanced retiree offering from Financial Soundings seeks to help retired participants take advantage of the group pricing and the fiduciary oversight delivered by qualified retirement plans—by helping participants craft a strategy to spend down assets without leaving the plan.

As the firm explains, the program begins with a baseline retiree analysis “proactively delivered to each plan participant flagged as retired,” and includes a personalized investment strategy recommendation in tandem with a monthly spending guide for their qualified plan assets.

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The analysis encourages the retirees to visit the Financial Soundings Retiree Portal to help complete and tailor the analysis for their specific situation. To complete the picture, retirees are encouraged to add any additional assets and retirement income sources, including Social Security, pensions, individual retirement accounts, non-qualified assets and spousal assets.

Retirees can also customize the spend-down calculation by adjusting the assumed life expectancy or setting a legacy percentage to leave behind to their estate.

“If education on any type of income product is desired, that can be included in the report and the program,” the firm says. “If desired for employees with assets over a certain level we can point them to more in depth services from our partner. Any changes made to the assets or assumptions will trigger an updated set of calculations and the retirees will be presented with a personalized dashboard, depicting the spend-down matrix broken down by income source, along with a new investment strategy recommendation.”

For key recordkeeper partners, which have real-time integration between platforms, the Financial Soundings retiree workflow is supported for single sign-on and re-allocation transaction requests. If the decision is made for the retiree participants to fund the cost for the program, the recordkeeper will be responsible for all fee deductions from the plan accounts.

More information is available here.

Data & Research January 11, 2018

Mortality Shifts in 2016 Largely Offset 2015 Movement

During 2016, mortality improvement in older age groups offset large mortality increases, mostly due to external causes in middle age groups, according to the Society of Actuaries.

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The rate of overall mortality improvement has slowed in the most recent five years, according to the latest mortality table analysis published by the Society of Actuaries (SOA).

SOA researchers created and released their latest report to provide insights on the historical levels and emerging trends in U.S. population mortality. The most recently released U.S. population mortality experience from 2016 has been incorporated and added to prior available data to enable analysis of mortality experience over the period 1999 to 2016.

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Turning to the fresh cut of the data, SOA finds the overall age adjusted mortality rate for both genders from all causes of death decreased by 0.6% in 2016.

“This decrease in overall mortality may seem to run counter to the CDC’s report that life expectancy at birth declined 0.1 years in 2016,” researchers note. “Generally, a decrease in the mortality rate would be expected to produce an increase in life expectancy. However, both figures are correct. In this respect, 2016 was a somewhat anomalous year.”

SOA researchers explain how, in most years, when age adjusted mortality rates decrease, life expectancy at birth would increase. Conversely, when age adjusted mortality rates increase, life expectancy at birth would decline. This is what occurred in 2015, SOA says, when age adjusted mortality increased by 1.2%, and life expectancy at birth declined by 0.1 years.

“The anomaly that occurred in 2016 is explained by the differing impacts on life expectancy of mortality rate changes of different ages,” according to SOA’s reporting. In 2016, increased mortality rates in the younger and middle ages (mostly due to accidents) reduced life expectancy at birth more than it was extended by mortality improvement at older ages. However, the overall age adjusted mortality rate for the entire U.S. population did decline, by the 0.6% cited above.

According to researchers, the practical outcome here is effectively that the overall decrease of mortality in 2016 reversed the experience of 2015. Mortality improvement in older age groups offset large mortality increases, mostly due to external causes, in middle age groups, SOA notes. All age groups, except ages 15 to 24, had lower mortality in 2016 than 1999.

Additional findings dissect mortality by gender, showing female mortality is lower than male mortality for all causes of death except stroke, which is similar, and for the combination of Alzheimer’s and dementia, which is higher. SOA further finds female-to-male mortality is comparatively much lower for external causes of death (accident, assault, and suicide) than natural causes of death.

The full analysis can be downloaded here.

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