PLANADVISER - July/August 2021 - 15

" But if they wait until retirement, they
will pay retail prices, and the psychological
hurdle of purchasing an annuity
at that point will keep them from taking
that step, " he says. " We think sponsors
should give participants the opportunity
to have lifetime income options in the
plan. That gives people financial confidence.
Purchasing an in-plan annuity
minimizes people's risk and increases
their retirement income. That said,
participants need to assess what is right
for their particular situation. "
Then there is the issue of fees. " A prevalent
misconception among participants is
the notion that the retirement plan has no
fees, " Daley says. On the flip side of this,
some participants think they need to go
with expensive investment options with
advice embedded in, such as managed
accounts. " This could lead to the participant
being sold a service or a product they
don't need, " he adds.
Adequate deferral rates are also crittalking
points
Consequences of Climate Change
The Government Accountability Office has
recommended that the executive director of
the Federal Retirement Thrift Investment Board
evaluate the Federal Thrift Savings Plan's investment
offerings in light of risks related to climate
change. " Climate change is expected to affect
financial markets over time, " the GAO noted.
A Tale of Two Economies
Workers at employee-owned S corporations reported being
on significantly more stable financial ground than did
other U.S. workers. During the COVID-19 emergency, ESOP
employees experienced dramatically less financial adversity.
They have had more stable jobs and better housing security
and retirement savings than have their non-ESOP counterparts.
Source: John Zogby Strategies, Employee Financial Health and Sentiments Amid the Pandemic
ical, says Michael Montgomery, managing
principal at Montgomery Retirement Plan
Advisors. " It's faulty for employees to
think that investment returns are more
important than what they're putting into
the plan, " Montgomery says. " How much
they save is just as critical. "
Because many participants mistakenly
think saving at the default deferral rate-
potentially 3%-is adequate for achieving
retirement security, sponsors and advisers
need to educate them that savings should
total 10% to 15% of their salary each year,
including any employer contributions.
" Otherwise, a 3% deferral rate is a disservice
to participants, " Montgomery says.
According to Daley, most participants,
especially near-retirees, need education to
understand their options-such as what
Social Security may provide them or what
health care supplemental insurance they
will need besides Medicare. " People ages
50 and older will be more receptive to such
education, " he adds. -Lee Barney
➜ Moneta appointed
Aoifinn Devitt as its first
female chief investment
officer. Devitt will align
investment programs with
firm goals and oversee
the research, evaluation
and selection of asset
classes and investment
vehicles.
➜ Jennison Associates
hired Guillaume
Mascotto as managing
director, head of
environmental, social
and governance
strategy. Mascotto is
based in New York City.
➜ The Pension Benefit
Guaranty Corporation
(PBGC) has appointed
Ann Orr as chief policy
officer. Orr will lead the
PBGC's Office of Policy
and External Affairs.
➜ QMA LLC has hired
David Blanchett as
managing director, head
of retirement research
for defined contribution
solutions. Blanchett
was formerly head of
retirement research at
Morningstar Investment
Management.
➜ BPAS is acquiring
Fringe Benefit Design
of Minnesota Inc. (FBD),
a provider of retirement
plan administration
actuatial and benefit
consulting services in
Minnesota and South
Dakota.
planadviser.com July-August 2021 | 15
➜
http://www.planadviser.com
PLANADVISER - July/August 2021

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