IRIC, SPARK Institute Introduce DC Retirement Income Framework
The Institutional Retirement Income Council (IRIC) and the SPARK Institute announced the launch of the Defined Contribution Retirement Income Solutions Evaluation Framework.
The resource aims to educate plan sponsors, retirement plan advisors, consultants, and fiduciaries about the full range of retirement income solutions available in the defined contribution marketplace.
The Framework provides standardized, side-by-side data on retirement income products from multiple providers, with a goal of helping retirement industry professionals make informed comparisons of product structures, fee models, guarantee features, liquidity options, and portability aspects.
“Retirement income has shifted from interest to adoption,” said Kevin Crain, executive director of IRIC. “This Framework provides the industry with the common language and comparative structure it has long needed to move from awareness to action.”
The Framework was created through a joint effort between IRIC and SPARK’s Retirement Income Committee, based on direct submissions from product distributors across the retirement income sector. Participating organizations represent the main product categories available to DC plan sponsors today, including:
- Guaranteed Lifetime Withdrawal Benefit (GLWB) solutions embedded in target date funds and balanced funds
- Guaranteed Minimum Withdrawal Benefit (GMWB) products offered through collective investment trusts
- Fixed indexed annuities with GLWB riders designed for in-plan deployment
- Deferred income annuities and Qualifying Longevity Annuity Contracts (QLACs)
- Single premium immediate annuities (SPIAs) accessible at retirement
- Managed payout strategies
“SPARK’s Retirement Income Committee has been focused on developing practical tools that support the entire defined contribution ecosystem,” added Tim Rouse, executive director of SPARK Institute. “This Framework marks a significant step forward in helping plan sponsors fulfill their duties to participants who are nearing and entering retirement.”
According to the IRIC and the SPARK Institute, participants can utilize the resource by:
1. Identifying the features most important to the plan (e.g., lowest cost, strongest principal protection, highest liquidity, or simplest portability).
2. Comparing profiles side-by-side using the consistent headings.
3. Using the “Typical Annual Income Payout Rate at Age 65” as an illustrative benchmark only. The actual rates are subject to current market conditions and may change.
4. Reviewing the insurer’s financial strength ratings and portability provisions, as these are critical fiduciary considerations.