Securian Financial Group Inc. has come out with a product aimed at employers that want to participate in a stable multi-employer retirement program: a multi-employer plan based on a group annuity.
(Related: Securian Airs Its First National TV Ads)
The St. Paul, Minnesota-based company is using a group annuity contract from its Minnesota Life Insurance Company affiliate to fund the plans in the new MEPconnect program.
The Platinum 401k Inc. will administer the program and serve as the principal administrative services fiduciary.
Fidelis Fiduciary Management will serve as the fiduciary for the investment options menu.
Securian is aiming the program at small and midsize employers. Securian says the program should help smaller employers offer retirement benefits at a relatively low cost per participant, by offering the kinds of economies of scale that large, single-employer plans typically get.
Years ago, some small and midsize employers contributed to traditional pension plan programs designed to serve employees from multiple employers. Many of those plans, which promised to pay the participants a set amount of income at retirement, have run into financial problems.
Securian’s new retirement program is a “defined contribution” program. Participating employers would say how much they would contribute on behalf of the participants, if anything, but without making promises about the final benefits.
Securian is setting up the multi-employer defined contribution plan program as some states are trying to set up new, low-cost, public retirement programs for their residents.
The move also comes as financial services groups are lobbying in Washington for Congress to ease efforts to sponsor multi-employer defined contribution retirement plans.
— Read Michael Montgomery Wins fi360 Fiduciary Article Competition, on ThinkAdvisor.