Q: Erick, based on employee feedback, our plan committee is considering adding lifetime income options to our plan in 2025. Do you have any advice on how to begin evaluating the pros and cons of available options and assessing the fiduciary responsibilities and risks involved?
A: Sure thing! I love that your committee discussed this. Lifetime income options come in a variety of flavors. Some simply provide guidance to participants in drawing down their balances, whereas others provide guarantees backed by state-licensed life insurance companies. Different options require different levels of participant engagement. Check out Groom Law Group’s recent white paper, “Is Your DC Plan Retirement Ready? Helping Participants Get To and Through Retirement,” which includes a comprehensive section on lifetime income options that summarizes the types of products currently offered, the varying features and benefits, as well as fiduciary and other considerations.
Next step: Let’s meet and discuss life income ideas to improve your 401k plan. We can also discuss you getting a 401k Fee Benchmark review. Book a meeting below.
Retirement Partners of California Can Help!
We’ll design an Employee Financial Education Plan to help improve your 401k participant results.
Disclosures, Sources, and Footnotes
For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.
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©2024 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.
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