How You Can Help Investors Solve the Retirement Income Puzzle

The topic of conversation is retirement income. And specifically retirement income in DC plans. The trend we’ve seen is growing where more and more participants are staying in the plan post-retirement.

You think about what it is that they’re going to invest in. There’s an easy, simple place to start and that is thinking about the plan documentation, thinking about the operational connections and plumbing to the record-keeping platform, making sure that all that’s in place so that when someone wants to turn on the switch so that that paycheck replacement comes from the DC plan – it can and does so simply.

The other thing to think about is where do you start from an investment product standpoint. The existing lineup is a great place to start: look at your QDIA, look at your retirement date, your target date, look at your stable value products, look at all those things that have been in your DC plan for years and put a lens on them of retirement income and see if there is a natural fit there – we often find that there is.

Beyond that then start thinking about some of these new and more innovative products that are happening in the retirement income space. Also look at personalized products, look at the things that are happening with managed accounts, a lot of options here, we think there’s a time and a place for many different investment products.

The question becomes which ones do you pick and in what order? We’d also offer up that you talk to your DC clients, your plan sponsor clients in a way that’s consultative around that, and we offer up a framework of how to think about it.

Consider thinking about a framework that gets into what those demographic needs are of the older participants in those plans. How do they think about their retirement income needs? Do they think about yield first? Do they think about duration? Do they think about liquidity? Do they think about asset preservation?

The right questions mapped to the right product types can give you a very clear roadmap for how to consult with your plan sponsor clients, and the best way to think about retirement income not only today, tomorrow, but one, two, and three years from now.

Thank you for your time.