Maybe employees who are retiring should get a choice of retirement income product options.
Steve Vernon, a retirement consultant, makes that case in a commentary distributed by the Institutional Retirement Income Council (IRIC), Iselin, N.J.
IRIC is a group backed by Prudential Financial Inc., Newark, N.J. (NYSE:PRU), and other individuals and companies with an interest in retirement services.
Vernon notes that many employers already offer employees a wide variety of retirement savings choices through 401(k) plans and other defined contribution retirement plans.
Workers who are retiring now need a pre-set menu of options for converting their retirement accounts into streams of income, Vernon says.
Vernon says a typical menu could include a lump-sum rollover to the account of the retiree’s choice; immediate fixed, variable and inflation-adjusted annuities; a rollover into a mutual fund company’s managed payout fund, which would allocate assets to stocks and bonds; and a stream of installment payments from the plan itself, made either using a fixed dollar amount or a fixed percentage of the retiree’s account balance.
In other ideas news:
- Voluntary Benefits of America L.L.C., Nashville, Tenn., says it many employers and voluntary benefits enrollers will want to have employees enroll online.
The firm has offered enrollers an automated, enroller-managed AutoApp system.
The firm has now developed a Web-based version.
The system walks an employee through the enrollment process and reduces the need for expensive one-on-one meetings, the firm says.
- Principal Financial Group Inc., Des Moines, Iowa (NYSE:PFG), says it has been having successful with a program that helps defined contribution retirement plan third party administrators (TPAs) get an edge on competitors by offsetting installation fees.
The program offers TPAs an installation expense allowance ranging from $1,000 to $5,000, depending on the size of the plan.
- Allison Bell