A forthcoming PEP from National Professional Planning Group, Lincoln Financial and Morningstar Investment Management will have the distinction of providing in-plan guaranteed income, the companies announced Thursday.
Lifetime income, particularly as part of a plan’s qualified default investment option, is a rarity in 401(k) plans. That is despite years of reassurances from the Department of Labor on plan fiduciaries’ responsibilities and provisions in the SECURE Act that made insurance products a friendlier fit within defined-contribution plans.
Separately, Lincoln is one of two insurers that is providing a guarantee within Income America, a 401(k) service that packages lifetime income with a target-date series.
But the pooled employer plan that the company and its partners announced this week would be among the first to offer a lifetime income option.
The product, called OpenPEP, has customized investment options that can be used as the default, or QDIA, according to the announcement. That includes a target-date series dubbed YourPath that uses BlackRock’s iShares ETFs as the underlying investments, as well as a separate QDIA, Stadion’s Storyline managed account service. Lincoln’s PathBuilder Income option can be included as part of a plan’s default, the firms stated.
NPPG acts as the pooled plan provider, while Morningstar Investment Manage is the 3(38) investment fiduciary.
Numerous other firms have been developing products specifically for PEPs, and dozens of companies have registered with the Department of Labor as plan providers, although most haven't yet launched plans.
Competitors in the young business have cited state automatic IRAs as a big growth opportunity for PEPs, as those states require most employers to provide some type of retirement plan for their workers.
Earlier this month, Morningstar Investment Management, along with Plan Administrators, Inc., announced a forthcoming PEP with its own branding — a plan that will use environmental, social and governance criteria for its investment selections.
Meanwhile, Raymond James snags Edward Jones advisor in Arizona.
New Morgan Stanley research shows retirement planning is a key area where advice is required.
ASA reacts as regulator drops no-deny policy, freeing firms and individuals to publicly dispute allegations after reaching settlements.
Joel Frank allegedly sold more than $39 million worth of investments in the Equilus Funds to more than 90 investors,
The Charity Parity Act would eliminate a costly IRA rollover requirement that blocks direct charitable transfers from workplace retirement plans.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
