A new online tool launched today by American Century Investments provides evaluation framework for in-plan guaranteed income options.
Income Blueprint is being billed by American Century as a first-of-its-kind online tool to help retirement plan fiduciaries implement a prudent process to evaluate and choose in-plan guaranteed income products for their clients in line with the recently passed SECURE Act’s guidance.
“As rising demand and high interest lead more retirement fiduciaries to consider in-plan retirement income options, they need clarity to make the best selections and confidence that they’ve fulfilled industry regulations and maintained their safe harbor.”
American Century’s Rick Luchinsky
The Income Blueprint tool is intended to simplify the complex world of available products and generates a customizable report that compares and scores each one according to plan preferences.
The Income Blueprint comes at a time of high interest from plan participants, combined with a safe harbor and portability provisions included in the SECURE Act, according to Glenn Dial, American Century senior retirement strategist.
“As the Baby Boomer generation ages, a growing number of people are moving from accumulation of assets to withdrawal of funds at retirement, increasing demand for these products,” said Dial. “Overall, interest is high, with 76% of respondents in our 2021 retirement survey showing interest in investment options specifically designed to help them draw income from their plan savings during retirement.”
“As rising demand and high interest lead more retirement fiduciaries to consider in-plan retirement income options, they need clarity to make the best selections and confidence that they’ve fulfilled industry regulations and maintained their safe harbor,” added Rick Luchinsky, American Century’s co-head of Intermediary Distribution. “We created the Income Blueprint tool to offer clients a holistic extension of their practice to help solve their needs.”
Three-step process
The Income Blueprint organizes the SECURE Act’s guidance on the selection of a lifetime income provider into three simple, documented steps. The first step identifies the type of insurance product based on unique features, such as guarantees, liquidity, growth potential and fee structure. Starting the process through the lens of these unique features, the company says, gives the Income Blueprint an objective, thorough and analytical foundation.
The second step considers costs in relation to features and benefits. In this step, users rank the importance of plan features to customize their weighting against costs. According to Dial, this step of the Income Blueprint addresses a significant need for advisors and plan sponsors shifting mindsets from fee-based decision making.
“The SECURE Act codifies that it’s OK to pay for a product that solves the needs of participants. The Income Blueprint provides an objective and holistic comparison of products so that fiduciaries can find a good fit based on features and benefits, as well as costs,” Dial said.
The third and final step considers the financial capability of the insurer. After the product is selected, fiduciaries must obtain written representation from the insurer and periodically review this document.
Safe harbor for fiduciaries
Income Blueprint users create their own personalized library of guaranteed income products and their features. The tool stores uploaded data for each individual product, including insurer documentation, for client-specific product comparisons. All information entered in Income Blueprint is saved by a specific user.
Income Blueprint provides a report that reviews the evaluation process and provides documentation for product selection. These reports align with the SECURE Act, with the goal of providing safe harbor for fiduciaries who use Income Blueprint to advise their clients.
A webcast is scheduled for Sept. 27 to introduce the Income Blueprint. Presenters Bradford Campbell, JD, partner with Faegre, Drinker and American Century’s Dial will demonstrate the tool.
SEE ALSO:
• Purpose-Driven Profits: How American Century’s Unique Structure is Paying Dividends
• The Value of Guaranteed Income In-Plan Solutions: GRPAA 2022 Industry Leaders Summit