Helping Employees Bridge the Retirement Income Gap
White paper from The Principal explains benefits of worksite access to income annuities
June 17, 2009 (Des Moines, IA) — The recent financial crisis has compounded the challenges facing those nearing retirement–widening the gap between what they have saved and what they will need.
A new white paper from the Principal Financial Group® shows employers how they can play a key role in bridging that gap by providing access to an easy, automated retirement income solution: income annuities.
A Plan Sponsors Guide: Bridging Employees' Retirement Income Gap with Income Annuities explains how employers can make income annuities available without adding burdensome costs and administrative headaches to the retirement plan.
"The vast majority of our plan sponsors tell us they are worried about what employees will do with their savings at retirement. They believe it is their responsibility to help," said Chris Mayer, vice president, Retirement and Investor Services at The Principal®. "Providing employees access to income annuities creates a sense of relief. Employers will know they have offered the array of choices to help employees build financial security in retirement."
The white paper presents an overview of how income annuities can be offered to employees enrolled in a defined contribution plan. It covers:
- The critical role employers play in employee retirement security
- A broad spectrum of products—from mutual funds to annuities to CDs—all under one roof
- Prospecting and marketing materials
- Three plan design considerations for offering income annuities to employees
- A look at common misconceptions about income annuities
- The benefits of income annuities to employers and employees
- Importance of employee education
- Tips on selecting an income annuity provider
With income annuities, employers ensure the benefits they offer remain valuable even into retirement. Income annuities also complement the growing "do-it-for-me" trend in retirement planning.
"Retirement plan features like automatic enrollment and auto deferral increases are 'do-it-for-me' tools to help employees save. The income annuity is the 'do-it-for-me' payout tool," Mayer explains.
The white paper is available in the Retirement section of the Principal Research Center, www.principal.com/research. It is the latest resource from Principal Retirement Income EdgeSM, a comprehensive program equipping financial professionals and their clients with education, tools and other retirement income planning resources.
About the Principal Financial Group
The Principal Financial Group® (The Principal ®) is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $236.6 billion in assets under management and serves some 18.8 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.