The first retirement plan provider to offer Shlomo Benartzi’s first-of-its-kind PensionPlus retirement withdrawal strategy solution will be OneAmerica, the Indianapolis-based insurance and financial services company announced today.
PensionPlus is an innovative, personalized retirement withdrawal/decumulation strategy developed by Benartzi. It provides participants with a monthly retirement paycheck tailored to the individual, based on their unique goals and needs in retirement. In addition, users maintain complete control over their plan assets and how they’re invested.
Sandy McCarthy, president of Retirement Services for OneAmerica, said PensionPlus was a natural fit for the company which strives to highlight the importance of holistic financial wellness for participants.
“As an industry, we’ve spent a lot of energy educating retirement plan participants about market risk, asset allocation and the importance of beginning deferrals early,” McCarthy said. “These are, of course, critical elements. But there’s more that’s needed to help individuals establish peace-of-mind about their financial security—and that includes a discussion about the importance of decumulation.”
McCarthy noted that in many cases, participants have been conditioned since their first paycheck to save a portion of their income for their future; yet, when retirement begins, there may be a psychological barrier to reverse course and begin decumulation.
“With PensionPlus, retirees can set an income replacement strategy with confidence, knowing that they have a plan matched to their unique needs,” said McCarthy. “This has the power to change the dynamic of how individuals prepare for retirement.”
Benartzi, a behavioral economist known for his research on retirement savings, explained that this first-of-its-kind solution incorporates a variety of behavioral insights and digital nudges not considered by more traditional retirement income projections.
“PensionPlus makes it extremely easy for every American to create a sustainable retirement paycheck that fits who they are and what they want.”
Shlomo Benartzi
“As people accumulate assets, they also accumulate differences,” said Benartzi. “This means that personalization is an essential part of retirement income planning. PensionPlus makes it extremely easy for every American to create a sustainable retirement paycheck that fits who they are and what they want. Our mission is to overserve the underserved and give all retirees the peace of mind they deserve.”
McCarthy said that approach resonates with OneAmerica.
“Personalization has always been the key,” said McCarthy. “Helping participants achieve financial confidence is only possible if what we’re offering them is relevant, meaningful and actionable for that individual at that point in their life. We have to go beyond one-size-fits-all.”
OneAmerica will offer access to PensionPlus to participants approaching retirement. In just a few minutes time, the service makes it easy for users to run projections on their own to learn how different preferences could impact their retirement income.
OneAmerica said in announcing the news that advisors who participated in beta versions of PensionPlus appreciated the value that the service brings to their customer relationships. Plan sponsors in the pilot embraced the effectiveness of the new service in helping participants understand the impact of important decisions like whether to delay Social Security for higher benefits, or how to factor a family inheritance into their retirement income plan.
“This collaboration is built on our belief in the power of relationships, education and customization,” said McCarthy.
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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.