The quest for effective guaranteed retirement-income solutions might have gotten a lot shorter.
Indianapolis-based OneAmerica unveiled an innovative type of profit-sharing retirement plan design Thursday, one that “leverages its company legacy by allowing participants to annuitize their account balance when they retire, providing them with the option of guaranteed income for life.”
Called OnePension, the plan design helps satisfy the industry demand for guaranteed lifetime income, according to the company, and is an “innovative option that removes the administrative hassles, costs, and inflexibility associated with a traditional defined benefit (DB) plan.”
“In their heyday, DB plans were how businesses and organizations addressed the desire to provide guaranteed lifetime income to the workforce,” Pete Welsh, vice president and managing principal of OneAmerica Retirement Services, said in a statement. “We’ve figured out a way to refresh a time-tested concept to fit the Defined Contribution-centric world in which we live, while at the same time providing maximum flexibility for the employer and the advisor.”
OneAmerica notes that is has provided retirement plan options through American United Life Insurance Company (AUL) a OneAmerica company, since the 1960s.
It claims OnePension is different than an in-plan guaranteed lifetime income fund—which is laden with uncertainty and additional fiduciary risk—and different than a variable annuity. OnePension is a qualified plan so it allows retirement plan sponsors to invest on behalf of participants.
“OnePension is a good fit at the workplace for plan sponsors wanting to provide participants an annuity (guaranteed lifetime income) to ensure that employees, once their working career is finished, have retirement income,” Welsh added.