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In-Plan Annuitization Team Recruits Wilshire

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What You Need to Know

  • The Income America team is using the Secure Act to help 401(k) plan participants convert assets into streams of income.
  • Members include American Century, Prime Capital SS&C and Wilmington Trust, along with Lincoln Financial and Nationwide.
  • Wilshire will monitor the underlying funds, the insurers' financial strength and the insurers' fees.

A consortium that wants to sell in-plan annuitization options through 401(k) plans has added a key player.

The Income America 5forLife consortium has added an investment advisor fiduciary, Wilshire Advisors LLC, which manages $83 billion in assets itself and helps other companies manage another $1.2 trillion in assets.

The consortium will offer sponsors of 401(k) plans and other defined contribution plans a series of target date funds that can be used to convert the participants’ assets into guaranteed streams of income for life and will be compatible with the federal qualified default investment alternative rules.

Development of the program is partly a response to the Setting Every Community Up for Retirement Enhancement, or Secure Act. The act provides some shielding against fiduciary responsibility, if in-plan annuitization options turn out to be disappointing, for employers that use a careful process to choose in-plan annuitization option providers.

Wilshire, a Santa Monica based consulting and services firm founded in 1972, will be responsible for recommending the investment funds and income stream insurers involved in the program.  It also will track the financial strength of the participating insurers.

Other consortium members are American Century Investments, Prime Capital Investment Advisors, SS&C Technologies and Wilmington Trust N.A., along with Lincoln Financial Group and Nationwide.

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