Tuesday, August 3, 2010

Benefit Adequacy is the Focus

The DOL's Assistant Secretary for the EBSA is lighting a fire under the dialogue concerning retirement income for 401(k) participants (or the lack thereof). In a recent article published by Fred Reish, entitled, "Adequate Benefit and Monthly Income", the discussion is expanded to include topics such as benefit adequacy, success measurement, distribution planning, and more. Reish presents a number of questions that providers, plan sponsors, and participants need to be able to answer comfortably. For example:

-Is your 401(k) plan providing an adequate percentage of final pay for your employees in retirement?

-How is benefit adequacy measured for 401(k) plan participants and is each participant aware of where they stand?

-How much does a participant need each year in retirement, and how do they make it last for a lifetime?

-How much can a participant feasibly withdraw each year to make their income last a lifetime?

These are all good questions. It's our belief that Fred Reish absolutely nailed it for those asking questions like, "What is the prevailing concern for most participants and plan sponsors with regard to saving for retirement?" and "What should I look for in a provider to ease participant concerns over accumulating retirement income?"

Please click here to view the article in its entirety.

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