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Current Perspectives Summary

  • Plan Design

Securing Retirement Income Series of Articles

October 27, 2011

Defined contribution (DC) plans have been giving participants great savings help in getting to retirement, but it’s now clearly apparent that workers need help getting through retirement. The social contract that dominated much of the twentieth century featured Social Security and defined benefit, or pension, plans. But that social contract has shifted dramatically in the past several decades. While workers have more control over their savings, they have far less certainty that those savings might last through retirement. Retirement insecurity is compounded by the fact that human behavior makes retirement savings and income decisions very difficult. Retirees don’t typically embrace traditional secured income products, even though these products might be in their best interests. To truly help DC plan participants, we believe the next step for DC plans is to provide an in-plan solution that offers secure retirement income.

Our Securing Retirement Income series of articles explores:

Article 1: How Did We Lose Confidence in a Secure Retirement?
Retirement insecurity now poses a daunting problem for America. The traditional safety nets are under siege, and consumers face rising healthcare costs and falling coverage. We take a look at how we landed in this predicament, and where to go from here.

Article 2: Helping Participants Get on Course to a Secure Retirement
Most workers want a steady income stream in retirement, but they’re not keen on any traditional choices offered to them. We discuss how the foibles of human behavior make retirement savings and income decisions even more difficult, and what can be done to help workers.

Article 3: Making a Secure Retirement Solution Work
A lifetime income solution within a defined contribution (DC) plan needs to provide control and certain for participants, as well as security and flexibility for plan sponsors. This paper discusses how to structure a solution so that it works for everybody—now and in the future.

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