Compliance July 26, 2023

Upcoming EBSA Webcast Will Focus on Helping Women Save for Retirement

The August 16 webinar will focus on challenges and circumstances women face when preparing for retirement, as well as how to make the most of an employer-provided plan.

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As women often face additional obstacles when saving for retirement, the Department of Labor’s Women’s Bureau and Employee Benefits Security Administration will host a webinar next month centered around ways women can make the most of their employer-provided plan and make prudent financial decisions when nearing retirement. 

The webcast, “Helping Women Take the Mystery Out of Retirement Planning,” will be held on August 16 from 2 to 4 p.m. EDT. The Social Security Administration, the Centers for Medicare & Medicaid Services and the Consumer Financial Protection Bureau will also provide information on key issues for women in planning for retirement. 

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While some women may be able to rely on employer retirement plans, many women interrupt their careers to raise children or act as caregivers. That can result in less savings in a workplace retirement plan, reduced personal savings and fewer Social Security benefits. 

Women’s retirement resources also need to last longer, because women typically leave the workforce earlier and live longer than men, often into their 80s and 90s, EBSA’s description of the webinar stated. 

“This webcast will help women nearing retirement unravel the mystery of preparing for life after work including the decisions you need to make, when you need to make them and what to consider so you can have a financially secure retirement,” EBSA stated.  

The webcast will cover: 

  • Challenges and circumstances women face and why it is important to plan ahead; 
  • Making the most of employer-provided retirement plan and checking to see if retirement savings are on track;  
  • Social Security and Medicare benefits, including factors to consider in deciding when to sign up for Medicare and when to begin claiming Social Security benefits and what they cover; and 
  • How to avoid financial abuse, fraud and scams. 

The webcast can be helpful for people nearing retirement or helping a relative prepare for the future, according to EBSA. 

Registration is available, and a link to the webcast will be emailed to each registrant.  

Individuals with disabilities who need special accommodations are advised to email golding.debra@dol.gov.  

Products July 25, 2023

TIAA Touts In-Plan Annuity Growth Even as Retail Sales Hits New Record

Retirement income needs, compared to high interest rates, are driving annuity growth in 2023.

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TIAA announced that its in-retirement plan annuity offering is now being used by more than 250,000 participant accounts, as retail annuity sales continue to boom.

TIAA, which has been providing annuity-backed retirement income products in 403(b) plans for more than100 years, introduced a custom default product in 2014, and then rolled the offering out more broadly in 2018 with RetirePlus. On Monday, the New York-based firm announced the milestone of a quarter-of-a-million participants are using the service designed to provide for the purchase of a guaranteed income option during the retirement-saving phase, along with institutional pricing.

“Retirement is becoming even more difficult to finance for Americans, and many are rightly worried about running out of money,” Kourtney Gibson, chief institutional client officer at TIAA, said in a statement. “RetirePlus helps plan sponsors empower their employees to build a better retirement by providing access to a ‘personal pension’-like guaranteed monthly income stream in retirement.”

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TIAA’s product can be used as a qualified default investment alternative in retirement plans, an option supporters of annuities often say is essential for the products to get widespread uptake with participants. Still, concerns among some advisers and plan sponsors remain about in-plan offerings, ranging from regulatory concerns—which have been eased with recent retirement legislation—to portability and cost.

QDIA Is Key

According to TIAA, the QDIA offering, which puts participants into a diversified portfolio that includes its TIAA Traditional annuity, gives participants “the simplicity of a target-date fund with the opportunity to turn all or part of their savings into guaranteed lifetime income in retirement.”

The firm had previously announced that RetirePlus signed its 250th institutional client in 2023, and today has over $20 billion in assets under administration.

TIAA also offers a fixed annuity provided through a managed account or target-date portfolio strategies in 401(k) plans. The firm has paid more than $5.6 billion in lifetime income to retired clients in 2022 and has $1.2 trillion in assets under management.

Another Individual Sales Record

In separate news, total annuity sales increased 12% year-over-year to $88.6 billion in the second quarter of 2023, insurance industry association LIMRA announced Tuesday.

The high was driven by record sales of registered index-linked annuities, or RILAs, and fixed indexed annuities, according to LIMRA’s U.S. Individual Annuity Sales Survey. The growth in those products was boosted in part by “double-digit equity market increases and stable interest rates” that have “prompted investors to seek out greater investment growth opportunity,” Todd Giesing, assistant vice president of LIMRA Annuity Research, said in a statement.

The association also noted that deferred income annuities topped $1 billion in sales in 2Q 2023 for the first time, in part due to buyers locking in relatively higher interest rates as the Federal Reserve considers slowing rate hikes.

“The remarkable growth of income annuity product sales is a result of broad growth across the industry,” Giesing said. “Reports in the second quarter that the Federal Reserve was expected to slow interest rate hikes likely prompted investors who had been sitting on the fence to lock in the favorable rate of returns offered.”

The quarterly increase resulted in 28% year-over-year growth in the first half of 2023, reaching $182.7 billion, the highest sales ever recorded in the first six months of a year by LIMRA.

The association is forecasting continued growth for individual annuity sales in 2023, with sales set to “potentially surpass the record sales set in 2022.”

 

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