| T. Rowe gets into 401(k) annuities
Mutual fund giant T. Rowe Price said it has started offering 401(k) plans an online platform that participants can use to purchase annuities. Two other 401(k) plan providers, Hewitt Associates and CitiStreet, already make the platform, Income Solutions, available to the 401(k) plans they work with. And last October, Fidelity Investments launched a somewhat similar product, Fidelity Lifetime Income Solutions.
Efforts to provide an annuity option to 401(k) participants are part of a growing focus on ensuring that employees have access to a guaranteed stream of income in retirement, particularly as defined-benefit pension plans fade away and Social Security gradually replaces less of workers pre-retirement incomes.
Matthew DiLiello, senior product manager at T. Rowe Price Retirement Plan Services, said Income Solutions provides 401(k) participants with a good mix of competitive shopping, institutional rates and choice in terms of insurance providers.
American Adults Still Expect To Retire With a Pension
Nearly half (48 percent) of all non-retired adult Americans expect to retire with a pension, according to a new poll conducted by Harris Interactive for the American Institute of Certified Public Accountants (AICPA). "Despite all evidence to the contrary, pensions are still regarded as a safety net for retirement," said Carl George, CPA, Chair of the National CPA Financial Literacy Commission. "Americans have to understand that many of the entitlements of their predecessors are not guaranteed. It is up to them as individuals to prepare for retirement. Otherwise, they may find themselves working far longer than they had intended." The safety net of a pension plan may not be there for many American workers, as more and more companies shift from defined benefit plans to defined contribution plans such as a 401(k).
Insurance Industry Needs To Re-Invent Retirement Planning Products ...
Even as traditional plans and other retirement entitlements begin disappearing, 48% of all non-retired adult Americans continue to look forward to retiring with a pension according to a recent American Institute of Certified Public Accountants (AICPA) survey. Meanwhile, the 2007 Annual Retirement Confidence Survey (RCS) revealed that while only 41% of workers or their spouses have employer-provided retirement benefits, 62% say they expect to receive income from such a retirement plan. According to another survey, the 2007 American Retirement Study, 42% of baby boomers (between 45 and 64) will not have the financial resources to maintain the lifestyle they want in retirement. Almost 31% of them say they will have to cut back on their lifestyle spending when they retire. The survey implies American workers realize the retirement system is undergoing a major transformation.
Paying Taxes Now May Pay Off In Retirement
Q. I will be retiring within the next few months, and I am confused about how to deal with my retirement accounts. When I stop working, must I convert my existing 403(b) accounts into IRA accounts?
Can I simply stop contributing and allow them to remain dormant until I need to withdraw the money? If I have to convert, will this have an impact on my desire to convert existing IRA accounts to Roth IRAs in 2010?
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SC nullifies SU retirement plan
The Supreme Court has declared a 37-year-old retirement plan of Silliman University in Dumaguete City as invalid and ordered the institution to pay separation pay and backwages, totaling eight years, to an employee it had retired in 1993. In an eight-page decision penned by Associate Justice Renato Corona and concurred in by Chief Justice Renato Puno and Associate Justices Angelina Sandoval-Gutierrez, Adolfo Azcuna and Cancio Garcia, the Supreme Court First Division affirmed an earlier decision of the National Labor Relations Commission finding Silliman University guilty of illegal dismissal when it retired Alpha Jaculbe after serving the University for 35 years. Jaculbe's retirement from her job as a nurse at the Silliman University Medical Center was based on the retirement plan of the University which mandates automatic retirement to full-time employees who had served continuously for 35 years or who had reached 65 years of age.
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