Traditional annuities are inflexible. Period. You get the monthly benefit you pay for. They provide a very valuable benefit which should be part of anyone’s retirement planning, but this inflexibility can be scary, as it takes away from the participant the ability to address unexpected contingencies. This fear comes from the second point: the funds used to buy the traditional annuity are gone for good. Other than payments made under a survivor annuity, the traditional annuity doesn’t give the participant any access to funds to pay for contingencies, nor does it typically pay a death benefit. So what’s a fiduciary to do?
Continue Reading Addressing Fiduciary Concerns in the Purchase of 401(k) Distributed Annuities: Dealing With The Five “I’s”- Part 2, Inflexibility and Inaccessability
Annuities
ERISA Section 404(a)(1)(b) Lost in the Shuffle: Whatever Happened to Minimizing Risk?
By Robert Toth on
Posted in General Comment
The mantra of Congress, investment advisors and the DOL over the past decade has been consistent: retirement plan assets must be invested in such a way to provide American workers with sufficient assets upon which to actually retire comfortably. This is as basic as apple pie, and a concept with which one can hardly disagree.
The DC Annuity Fog
By Robert Toth on
Posted in Lifetime Income
It has been a couple of weeks since we’ve last posted a blog, and with good reason. Between Evan, Monica and I, this two month span has us doing some 15 presentations and articles, whie keeping up with clients (and a couple of us squeezing in some overdue vacation time!). Monica is speaking this week…
The New Generation of Annuities: Balancing Flexibility, Stability and the Pooling of Interests
By Robert Toth on
Posted in Lifetime Income
I mentioned in a posting last week that we will take some time on this blog to work through a number of the legal and technical issues related to annuitizing out of 401(k) plans. This, in effect, allows the 401(k) plan to offer the best features of the Defined Benefit and Defined Contribution plans without…
401(k) Annuities: “Defined Benefit” Guarantees Using a 401(k) Account
By Robert Toth on
Posted in Lifetime Income, Lifetime Income Published Papers
It is back to the future, in an odd sort of way. There is growing trade press coverage on the interests of 401(k) plans and plan participants on turning a portion of participants’ account balances into a "defined benefit-like" guaranteed income stream. Follow, for example, this link to Plan Advisor.com.
There are really two ways…