With a goal of further tailoring investment portfolios and plan design for small- to medium-sized businesses, New York-based financial services organization Equitable today announced the addition of customized managed accounts and a cash balance plan to it group retirement plans.
Managed accounts provide an option for people looking for guidance in creating retirement plan allocations, with a customized portfolio for each plan participant based on their current age, location, contribution rate, marital status, gender, and balance, and then can be further personalized by the participant online.
As a result, they can be much more tailored than other qualified default investment alternatives (QDIAs). This customization can be beneficial to helping retirement savers achieve their goals.
Cash balance plans can allow business owners to lower their tax burden, accelerate retirement savings and save more for retirement.
“Despite the fact that small businesses are facing one of the most challenging periods in recent history given the COVID-19 pandemic, small business owners aren’t giving up their dreams of financial stability and a comfortable retirement for themselves and their employees,” said Jessica Baehr, head of Group Retirement, Equitable. “Extending increased customization and personalization in their 401k plans, along with advice and a full suite of employee benefits solutions is important to helping small business owners and their employees weather uncertainty and plan for their financial futures.”
Research conducted by Equitable in late 2020 showed that small- to medium-sized business owners and their employees continue to prioritize saving for retirement despite hardship caused by the COVID-19 pandemic. While almost 40% of small businesses have reported loss of income due to the pandemic, the survey showed that only 12% have stopped or lowered their retirement contributions and only 2% pulled money out of the markets.
Survey respondents also expressed knowing that their future retirement is secure would be a great stress relief. Almost 90% of small business owners want to preserve the current value of their investments and 70% want to identify opportunities to grow their investments.
“Small businesses employ half of the U.S. workforce. They are an important part of the fabric of our communities and are vital to our economy,” continued Baehr. “With so many of these businesses facing uncertain futures due to the impact of COVID-19, we are committed to delivering the expertise, technology and intuitive solutions our small and mid-sized business clients need to keep their businesses going and help them and their employees continue to plan for their financial futures.”
The new managed account will be provided through Stadion Money Management, an investment management firm and 3(38) participant level fiduciary also approved by both institutional plan level fiduciary partners, Wilshire and SWBC. There are no minimum account balances for either plans or their participants.
SEE ALSO:
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- RIA Aggregation Firms Drive 401k Managed Account Adoption
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
