By The Numbers
By the Numbers: Annuities in 401(k) plans
George Moriarty, chief content officer at InvestmentNews, says that while 401(k) plan sponsors were interested in adding annuities to plans earlier this year, the pandemic has pushed the issue far down their list of priorities.
Transcript:
I’m George Moriarty, and this, is By The Numbers.
Today, we’re talking annuities, and the number of the day is 401
At the start of the year, 401k retirement plan sponsors were zeroing in on the opportunity to include guaranteed income annuities in retirement plans. But those plans have gone to the back burner.
According to a survey by T Rowe Price that was released in September, sponsors are more concerned with managing CARES Act provisions and making basic adjustments to client plans, than they are with annuities. T Rowe heard from more than 5500 plan sponsors who said the next priority is cutting costs by employing strategies that include suspending company contributions and reduced administrative expenses.
The likelihood of in-plan annuities ranked fourth among other outcomes of the Secure Act, but did come in ahead of the likelihood of pooled employer plans, aka PEPS, being used by companies that have existing plans.
In this post-Covid world, we are seeing annuities remain a question mark, because plan sponsors aren’t super eager to be first to put them in a 401…k.
And that’s a wrap for this week. I’m George Moriarty, and from my home office to yours, stay safe, and we’ll see you next week.
