Post SECURE Act, momentum for protected lifetime income products within retirement plans continues to build. Another step was taken July 19 when Lincoln Financial Group announced the addition of a guaranteed income solution as part of a target-date retirement option.
With the launch of Lincoln PathBuilder Income powered by YourPath, Radnor, Pa.-based Lincoln is adding to its suite of in-plan protected income solutions that provide savers a monthly check for life, helping Americans ensure they won’t outlive their savings in retirement.
This new product brings together the flexibility of YourPath risk-based target-date portfolios while building on the foundation of Lincoln PathBuilder solutions.
“While much of the focus in retirement planning is on saving, only a third of savers feel extremely or very confident that they will have sufficient income that lasts through retirement,” said Ralph Ferraro, senior vice president, Retirement Plan Products and Solutions, Lincoln Financial Group, in a statement announcing the new product. “In fact, we are finding more consumers have significant interest in an in-plan investment option that would provide guaranteed lifetime income, as ultimately, a retirement plan should include a plan for retirement.”
More than 70% of retirement plan participants say they are interested in an in-plan investment option that would provide guaranteed income, according to the 2021 Lincoln Retirement Power study, and more than half of participants said they would be even more interested if the option were part of a target-date fund.
Half of interested participants also say they would increase their contribution if a guaranteed income option were offered. For those who do not currently participate in their employer-sponsored retirement plan, the option could be motivation to start saving, as nearly half said they would be more likely to start participating in a retirement plan if in-plan income was an option.
Next-generation auto feature
Over the past decade, automatic plan design features have played an important role in helping improve retirement plan outcomes.
Qualified default investment alternatives (QDIAs), automatic enrollment and automatic deferral increases help boost participation and improve plan savings rates, giving participants a better chance to achieve retirement readiness. And now, with the new product, Lincoln says employers can help participants generate a protected stream of income in retirement by leveraging the proven success of auto features and including “auto income” as a part of their target-date portfolios.
Flexible and portable
The company notes plan participants will always have full access to their account balance with Lincoln PathBuilder Incomepowered by YourPath, as the investment is fully portable, and they have the flexibility to determine when to start taking income at a time that is convenient to them and aligned with their overall plan for retirement.
In addition, participants have the option of beneficiary protection, enabling them to pass on the remaining account value to loved ones.
The new product is aligned with the provisions included in the SECURE Act, and Lincoln has selection and monitoring tools available to employers, along with a high level of support to plan fiduciaries.
“We know that today’s participants want more options that help them achieve the retirement they envision, and that includes knowing their savings will last a lifetime,” said Ferraro. “We look forward to helping more Americans gain the security that comes with knowing they will receive a monthly check for life by continuing to build out our suite of in-plan protected solutions.”
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