Product & Service Launches – 8/23/24

Custodia Financial introduces retirement loan protection service to protect against defaults; Prudential enhances its employee well-being solutions; and Lincoln Financial expands care services for beneficiaries.

Custodia Financial Offers ‘Retirement Loan Protection’ Insurance Product

As many workers struggle to avoid defaulting on workplace retirement plan loans, Custodia Financial LLC has introduced retirement loan protection—an insurance solution provided to participants from the employer that provides protection for 401(k) or other employer-sponsored plans and ensures participant savings “remain intact.”

For example, if a participant loses their job, Custodia will take over their loan payments during the months they search for a new job. Some of the offering’s benefits include immediate availability with no technology integration or enrollment period and a “seamless activation process.”

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Employers pay for RLP, and it can be done through plan assets.

“Plan assets will typically take priority over the company paying, but we expect this to vary by industry and plan size,” said a Custodia spokesperson. “The current split is relatively even. Additionally, we emphasize that pre-existing budgets for benefits, financial wellness, HR, inclusion, and—importantly— retirement plan forfeiture accounts are all viable sources to cover the expense. Regardless of source, the payment is tax deductible.”

Prudential Launches Enhanced Employee Well-Being Solutions

Prudential Group Insurance has added enhancements to its well-being program with the launch of a digitally accessible hub, offering a new access point to solutions and partnerships aligned with the company’s life, absence and disability products.

Through the digital hub, Prudential is improving access to benefits that help employees who are welcoming a new child, changing jobs or coping with a disability or leave event.

The well-being solutions include live financial education, caregiving support, behavioral health tools, debt management and housing counseling to help develop an action plan to achieve goals.

“We continuously hear from employers that they are looking for increased utilization of programs that support their employees’ well-being,” stated Jessica Gillespie, Prudential’s head of group insurance product and underwriting, in a press release. “Our comprehensive program connects employees with the right resources at the right moment through alignment with our life, absence and disability products. The new digital hub adds a simple way to access and utilize these tools.”

Lincoln Financial Expands Care Services for Beneficiaries

Lincoln Financial Group has launched new grief support services for Group Life beneficiaries, “providing care beyond the claims process.”

The new service, provided by Empathy—a comprehensive support system for the bereaved—can help families navigate the logistical aspects of loss, including estate settlement, executing a will and more.

These services are now automatically available to all customers who have purchased Lincoln Group Life insurance through the workplace and to the beneficiaries of their policies.

Media’s Role in Creating Retirement, Investing Stress

A Capital Group national accounts manager makes the case that simply turning off the TV may help boost financial wellness.

Misleading depictions of retirement on television can prevent Americans from focusing on and even achieving long-term financial goals, according to a Capital Group senior accounts manager speaking Tuesday during a webinar, “Stop Playing Mind Games.”

Advertisements and television often portray retirement as an active, joyful lifestyle full of leisure, when the reality is often very different, said Jonathan Young, a senior national accounts manager at Capital Group.

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“The media is showing us this ideal image of retirement,” Young said.

Very often, people may retire from one job, but return to work not by choice, but out of necessity, Young noted. For others, health issues prevent them from reentering the workforce even when they need to, and they must find other means of financial assistance. Both realities stand in stark contrast to idealized images of retirement.

This creates unrealistic expectations for many Americans, ultimately leading to disappointment and regret, said Young, adding that regret can then cause paralysis from the fear of making the wrong choice.

“This mind game confuses them, makes them feel guilty, makes them regret the decisions they made to do something or not do something,” he said. “Sometimes doing nothing was the worst decision.”

Turn to Advice

Young said behavioral coaching can help bridge the gap between investment returns and what investors often experience.

“Behavioral coaching can be a huge step forward in making everyone’s lives a little bit better when it comes to investing,” he concluded.

Capital Group, like many financial services firms, has ramped up its holistic financial wellness programming for clients and their participants. In July 2023, the firm announced a partnership with Financial Finesse to offer wellness coaching to clients in the large plan sponsor market.

“We have to help [investors] see around the corners to make better decisions,” said Young. “This may mean changing your plan design, changing the recordkeeper, changing your enrollment system, adding some of these auto features. These adjustments can help a lot to minimize overconfidence, herd mentality, regret, etc.”

News Nightmares

When it comes to investing and saving decisions, Young also discussed the negative impact coverage of war, the COVID-19 pandemic and political unrest can have on financial decision making.

“It unsettles investors,” Young said, “When they are unsettled, they’re less likely to stay in tune with their long-term goals. They lose sight of objective-based investing.”

Young’s advice for avoiding the anxiety triggered by current events is to “change the channel,” referring to watching less coverage. He suggested that by controlling the environment, whether in the office or at home, investors and retirees alike can remain focused on their long-term goals instead of getting swept up in the chaos of the news cycle.

“Maybe consider the Travel Channel,” he suggested. “Every now and then, the Travel Channel comes on, and they’ve got that million-dollar RV show. I’ve got to tell you: That looks like an intriguing retirement to me—riding around from national park to national park.”

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