SOURCE: Institutional Retirement Income Council

September 15, 2016 10:41 ET

Institutional Retirement Income Council Releases Issue Brief on Adding Distribution Options to Defined Contribution Retirement Plans

ISELIN, NJ--(Marketwired - Sep 15, 2016) - The Institutional Retirement Income Council (IRIC), a non-profit think tank for the retirement income planning community, has released a new issue brief on adding distribution options to defined contribution (DC) retirement plans. The paper, "The Evolving DC Plan - from Accumulation to De-accumulation," addresses critical questions plan sponsors often ask and need to answer when evaluating whether to add distribution (or de-accumulation) options to their DC retirement plans.

With DC plans becoming the primary vehicle for employees to secure their retirement, today's employees have a greater demand for features that can help them not only to save during their working years, but also to draw retirement income after they stop working. To help meet that demand, growing numbers of employers are considering adding various distribution options to their plans. The most common options other than a lump-sum distribution are installment payments over a pre-determined period of time, periodic withdrawals without a fixed payment schedule, and an annuity, which provides for payments over the life of a participant or over the life of a participant and a designated beneficiary. 

"De-accumulation strategies are the natural next step in the evolution of retirement plan offerings," said Robert Melia, vice president, product development, Retirement Plan Services, Lincoln Financial Group and an IRIC advisor who authored the brief. "While adding de-accumulation options can be beneficial to both plan sponsors and employees, the process of evaluating whether to offer one and which options make the most sense for an organization and their plan participants requires careful consideration."

The IRIC issue brief provides comprehensive answers to nearly a dozen frequently asked questions that can lead plan sponsors to a practical implementation of adding certain distribution options to a DC plan. These include questions such as:

  • Do most defined contribution retirement plans provide for installment payments, periodic payments or some type of annuity product?
  • Are payment options available for prototype plans and what does it cost to add an option?
  • What increases in administrative complexity will a plan sponsor face if any of these options are added to a prototype plan?
  • Why will adding a distribution option be in the best interest of a plan participant?
  • Will adding a distribution option increase a plan sponsor's exposure as a plan fiduciary?
  • Are there any financial benefits to plan sponsors for adding a distribution option?

"The need for plan sponsors to consider de-accumulation strategies and options for their DC retirement plan participants has never been greater. De-accumulation strategies can advance an employer's goal of effectively managing their human resources, by motivating high performance and enabling orderly, 'on time' retirement, while giving their employees access to good, institutionally priced retirement plan features and services," said Melia. 

The issue brief, "The Evolving DC Plan - from Accumulation to De-accumulation," is a must read for plan sponsors considering adding distribution options to their defined contribution retirement plans. To obtain a copy, please visit

About The Institutional Retirement Income Council

The Institutional Retirement Income Council (IRIC) is a non-profit, membership-based organization of industry advisors who are dedicated to sharing best practices, informing about legislative and regulatory issues, and facilitating solutions for plan sponsors and their participants. IRIC's mission is to facilitate the culture shift of defined contribution plans from supplemental savings programs to programs that provide retirement security. By providing a forum for insightful, solutions-oriented thought leadership on institutional retirement income, the IRIC is promoting the need for retirement income adequacy for defined contribution plan participants.

About Lincoln Financial Group

Lincoln Financial Group provides advice and solutions that help empower Americans to take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE: LNC) and its affiliates. The company had $223 billion in assets under management as of June 30, 2016. Learn more at: Find us on Facebook, Twitter, LinkedIn and YouTube.

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