Retirement Income, From the Outside Looking In

Thursday, September 3, 2020


How interested and far along is American Water’s DC plan when it comes to a retirement income option for its participants? In your estimates, how much interest is there when it comes to your participants and your peers within the plan sponsor community? 

We have not educated our committees on the subject yet but we plan to during the second half of 2020.

What remains, in your opinion, to be the biggest obstacle to the implementation and widespread usage of retirement income options in the DC space? Fiduciary concerns, complex structure, simple lack of need or interest, or something else entirely?

  1. It requires a coordinated approach with HR and Treasury (investments and HR)
  2. Fiduciary concerns are a concern
  3. Complexity of products, comparing products and analyzing plan demographics and how the products fit the needs of the participants are all required
  4. How many solutions are an issue – 1 or more?
  5. Which solutions fit which participants best?

The SECURE Act has provided more clarity and safe harbors for fiduciaries when selecting annuities, what kind of additional regulatory or legislative development related to retirement income would help in spreading the adaption?

Concerns about keeping participants in the plan and additional fiduciary role of post-retirement.   Will solutions meet participants needs?  What is the outcome if there is underperformance or participants do not believe it is the right solution for them?

The pandemic has shown us both market volatility in the early stages and a market rebound more recently; overall, how do you think this episode impact, if any, retirement income in the eyes of plan sponsors and participants?

Employees are more concerned than ever about retirement.  What will future returns bring?  Solutions that take out market risk, such as retirement income solutions, should be well received.

Has there been any implemented retirement income option at any of your peers’ plans that have impressed you?

I am not really educated about what others are doing.  I would definitely like to know more.


For more discussion and case studies on retirement income and more, join us at our Virtual Half Moon Bay Conference on September 15, 16 and 17 from 1:00 to 3:00pm EST everyday!

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Author: Jerry Xia

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