Unum Group Plans to Add Guaranteed Lifetime Income Options

At financial insurance provider Unum Group, selecting retirement income options to implement for its plan participants—from the multiple options available—meant no single option would do.

Unum is planning to add to its 401(k) plan two guaranteed lifetime income options, expecting to implement in-plan annuities “by the end of the first quarter” of 2024, says Carl Gagnon, Unum’s assistant vice president for global financial well-being and retirement programs, and Ben Roberge, the company’s director of financial and retirement programs.

“The first piece that’s going to go live will be a marketplace where our retirees will have the option to take a portion of their retirement income or their retirement savings and transfer that into an annuity,” Roberge says.

Unum plans to add a second guaranteed lifetime income offering in early 2025.

“We thought [that], based on our population, [what] would be helpful was something on the deferred side, so a [qualified longevity annuity contract],” Roberge says. “We explored a lot of options, and that’s one of the pieces that we’re also going to add. When evaluating the two, we decided that more than one guaranteed solution was actually the right fit for our [plan], in combination with a nonguaranteed solution that we already had in place.”

In 2021, Unum added a nonguaranteed Fidelity Investments systematic withdrawal program to its 401(k) plan. At the time, “we also started considering the guaranteed side as well, because we [have] a frozen pension plan,” Roberge says.

Adding retirement income options culminates a multi-year journey of evaluating the available options and their fit for Unum’s workforce.

Unum plans to target—with communications about the guaranteed options—plan participants who are nearer to retirement through intranet messages, email and postal mail, Roberge says.

Unum has “leveraged one of our partners which is a dedicated financial concierge service through Brightside, where [participants] can speak with a real human that is a financial consultant on the other end to help educate them on the retirement income options that are available,” Roberge says.

For Unum, incorporating options for participants to consider was key as it examined retirement income possibilities.

“We were really looking to be as comprehensive as possible,” says Roberge.   

Adding guaranteed options required submitting requests for proposal, learning from the plan’s existing investment consultants at Aon, coordinating meetings with the plan’s fiduciary and finance committees and consultants, and securing the specialized support of consultant &Co Consulting, Roberge says.

“We brought forward a number of solutions from the RFP that we thought, based on cost and structure, would fit well into our plan for our demographics,” Roberge says. ”Then we selected a group of finalists from that—that met all those criteria—brought them all in for finalist presentations in front of the committee. We then had a separate debrief meeting, after those finalist meetings, to select the options and come forward with a recommendation that made the most sense for our plan.”