OneAmerica unveiled a type of profit-sharing retirement plan design that leverages its company legacy by allowing participants to annuitize their account balances when they retire, providing them with the option of guaranteed income for life.
Known as OnePension, this plan design helps satisfy the industry demand for guaranteed lifetime income. It also removes the administrative hassles, costs, and inflexibility associated with a traditional defined benefit (DB) plan.
“In their heyday, DB plans were how businesses and organizations addressed the desire to provide guaranteed lifetime income to the workforce,” says Pete Welsh, vice president and managing principal, OneAmerica Retirement Services. “We’ve figured out a way to refresh a time-tested concept to fit the defined contribution (DC)-centric world in which we live, while at the same time providing maximum flexibility for the employer and the adviser.”
OnePension is different than an in-plan guaranteed lifetime income fund—which OneAmerica says is laden with uncertainty and additional fiduciary risk—and different than a variable annuity. OnePension is a qualified plan, so it allows retirement plan sponsors to invest on behalf of participants.
“OnePension is a good fit at the workplace for plan sponsors wanting to provide participants an annuity (guaranteed lifetime income) to ensure that employees, once their working career is finished, have retirement income,” says Welsh.Welsh recommends that any interested retirement plan sponsor contact its OneAmerica representative to learn more about how it and its employees can have guaranteed income for life.
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