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Pension and Employee Benefits: Code, ERISA, & Regulations

Pension and Employee Benefits: Code, ERISA, & RegulationsNew
Authoritative and comprehensive reference to pension and selected welfare benefit provisions of the I.R.C., ERISA and the associated regulatory authority.

CCH® PENSION AND BENEFITS — 5/08/08

Annuities in 401(k) plans gaining momentum, report finds

The use of annuities as an investment alternative within 401(k) plans will gain momentum as those approaching retirement seek to create guaranteed retirement income streams, according to a report by the Financial Research Corporation (FRC).

Conceding that a barrier to more widespread acceptance of annuities within 401(k) plans has been a negative perception of annuities, Luis Fleites, vice-president and director of marketing for FRC, advocates improved communication that explains to participants that they would be purchasing an income option for retirement. He notes that certain annuity providers are proactively working to make retirement income part of asset allocation strategies, and have created model portfolios which integrate both variable and fixed annuities. While this effort is not confined to defined contribution plans, the FRC anticipates that such efforts will help boost the appeal of these products within defined contribution plans. FRC expects that a gradual acceptance of in-plan annuity options will give rise to the emergence of guaranteed retirement income as an asset class.