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Engineering, analytical and operations. These are the three distinct and dynamic categories (“stacks”, perhaps?) of knowledge into which the lifetime income markets seem to be organizing itself-out of necessity, I would argue.
We’ve known for a very long time that transforming defined contribution plans into vehicles which facilitate the accumulation and distribution of income
The DOL’s most recent advisory opinion, 2025-04, helpfully affirms two separate legal principles upon which many of the defined contribution lifetime income programs being offered in the market currently rely. The AO is also very useful in the manner in which DOL describes one very specific program, the LIS program offered by Alliance Bernstein, offering
As part of the DOL’s efforts under Executive Order 14192, titled Unleashing Prosperity Through Deregulation (90 FR 9065, Feb. 6, 2025), the Department undertook to withdraw two seemingly innocuous annuity regulations which, by any cursory review, appeared to have outlived their usefulness. I would suspect that most of us didn’t give those withdrawals a second
If any company in the United States wants to sell you a guarantee that- in return for a premium- they will make monthly payments to you for as long as you are alive, that company simply needs a license from a state to do so.
This really-not-so-simple requirement actually has massive implications. Licensure is a
Executive’s Life’s 1991 collapse made a mockery of the insurance company rating system. Just months prior to its demise, S&P had given that insurer its highest rating (AAA, “Extremely strong capacity to meet financial commitments”) and Moody’s was awarding it one of their highest ratings at a1. An excellent review of this debacle was published
I had to chuckle a bit when I first read Nevin Adam’s excellent (of course) recap of the latest DC class action lawsuit, this one involving JP Morgan Chase Bank’s DC plan’s selection of stable value funds. He noted the complaint alleges that “throughout the Class Period, identical or substantially identical stable value funds
The ongoing Pension Risk Transfer (PRT) litigation poignantly demonstrates the growing importance of the SECURE Act’s “Annuity Safe Harbor” provision to the continuing efforts to design and develop responsive DC Lifetime Income programs.
The PRT plaintiffs claim fiduciary violations of the DOL’s “safest available annuity” (or “SAU”) requirements under DOL Reg 29 CFR 2550.404a–4 by
The efforts to get some sort of handle on how to review, assess and implement DC lifetime income programs is very reminiscent, to me, of my experiences following the system-wide impacts following the fundamental changes introduced by the 2007 403(b) regulations from the IRS-along with the rippling effect they had on the application of DOL
There are substantial efforts underway in many parts of the industry to develop similar sorts of benchmarking tools for assessing, comparing and monitoring the growing variety of lifetime income programs for defined contribution plans. A very real challenge these developers face arises from the fundamental difference in the nature of the investments involved: existing equity based assessment tools translate poorly into critiquing programs where decumulation risks are the critical factor. Even the language used to produce these new tools is demanding a new mind set.
Continue Reading Benchmarking Outcomes, Not Fees
The growing acceptance of the idea that defined contribution plans need to provide participant access to a “DB-Like” retirement income benefit is only really possible now because of the foundational work over the past two decades by key policy thought leaders like Mark Iwry, David John, and a handful of others.
Further success of this