Question: Based on employee feedback, our plan committee is considering adding lifetime income options to our plan in 2025. Do you have any advice on how to begin evaluating the pros and cons of available options and assessing the fiduciary responsibilities and risks involved?
Answer: Lifetime income options come in a variety of flavors. Some simply provide guidance to participants in drawing down their balances, whereas others provide guarantees backed by state-licensed life insurance companies. Different options require different levels of participant engagement.
Check out Groom Law Group’s recent white paper, “Is Your DC Plan Retirement Ready? Helping Participants Get To and Through Retirement,” which includes a comprehensive section on lifetime income options that summarizes the types of products currently offered, the varying features and benefits, as well as fiduciary and other considerations.
