It’s clear today that DC plans, for all their successes, still fall short of helping participants with preserving assets in their pre-retirement years and generating lifetime income once they’ve stopped working. The economic fallout from the COVID-19 pandemic will likely compound these challenges. Policymakers in Washington have already indicated their support for a third evolution in DC Plans with the overwhelming passage of the SECURE Act into law in December 2019. Among other things, the act mandates that DC plans provide plan participants with individualized projections of how much retirement income their DC account balances will generate in the future.
By embracing new technologies, customization opportunities, and risk-mitigation solutions, DC plans have the potential to help workers meet their retirement income challenges.