The adoption of retirement income within defined-contribution plans may not yet be widespread. But once a plan sponsor decides on a retirement income offering , it also commits to benchmarking it.
Rob Massa, managing director and Houston market retirement practice leader at Prime Capital Financial, says benchmarking target-date funds at baseline—without retirement income options embedded—can be difficult, as each choice embodies a different glide path and risk profile.
“Now you add income into the mix [of the fund], and you’ve added a whole new layer” of fiduciary considerations, Massa says. Sponsors should ask themselves, “Why are we offering retirement income, what are we trying to achieve, and how do we want to fulfill that?”
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