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A More Paternalistic Fiduciary Lens in a Post-SECURE Act World

Nov 10, 2020

Key Takeaways

  • DC plans will evolve beyond being solely asset accumulation vehicles.
  • Plan sponsors should help participants manage the risks they face.
  • New tools are becoming available to help sponsors evaluate options.

 

As defined benefit pension plans become increasingly scarce in the private sector, growing numbers of American workers will need to create their own source of lifetime income. Defined contribution (DC) plans such as 401(k)s must evolve from being just savings plans. The passage of the SECURE Act in 2019 has made it clear that plan sponsors should be doing more to help workers generate an adequate amount of lifetime retirement income.

The challenge is that in a DC plan world, workers bear a significant amount of risk in their journey to generate that lifetime retirement income. Fortunately, solutions are now available that can be adopted to help mitigate many of those risks.

 

As plan fiduciaries, plan sponsors will need to take a closer look at evaluating and potentially adopting these new solutions. New tools are becoming available to allow plan sponsors to perform this evaluation.

 

For Compliance Use Only:1042187-00001-00

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