Evaluation guide sections

After an in-plan guarantee is added to the plan's investment lineup, it's important to continue to review the investment option for appropriateness. When monitoring investment options, the process for guaranteed lifetime income solutions is no different. Plan fiduciaries should follow the same decision-making process(es) that they use for exploring traditional mutual funds.

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Ongoing monitoring and selection

After the selection process has been completed, plan fiduciaries will shift to ongoing monitoring of their selections, including:

  • Taking steps to monitor that participants are receiving appropriate educational information so that they too may make good and informed decisions
  • Taking steps to monitor the continued viability and financial credibility of the insurer, including receiving the written representation by the insurer as to their ability to meet financial obligations1
  • Seeking out competitor information on similar solutions, features and benefits
  • Comparing costs and fees against competitor costs and fees
  • Seeking out information on new and innovative solutions that are recently available
  • Getting feedback from plan participants; plan fiduciaries can also partner with the recordkeeper to determine if participants have adopted the solutions and whether they're actively contributing

Annual plan reviews

Plan fiduciaries should, as a best practice, do annual plan reviews with their financial professional, third-party administrator and/or legal counsel to ensure that their document is up to date with all enacted legislation and continues to meet the goals and objectives previously determined for the plan.

[1] Setting Every Community for Retirement Enhancement Act, P.L. 116-94; Written representation from the insurer: The representations to be provided by the insurer are as follows:

  1. The insurer is licensed to offer guaranteed retirement income contracts
  2. The insurer, at the time of selection and for each of the immediately preceding 7 plan years:
    • Operates under a certificate of authority from the insurance commissioner of its domiciliary state that has not been revoked or suspended
    • Has filed audited financial statements in accordance with the laws of its domiciliary state
    • Maintains and has maintained reserves which satisfy all the statutory requirements of all states in which the insurer does business
    • Is not operating under an order of suspension, rehabilitation or liquidation
  3. The insurer undergoes, at least every 5 years, a financial examination by the insurance commissioner of its domiciliary state
  4. The insurer will notify the fiduciary of any change in circumstances after providing the above representations, which would preclude the insurer from making such representations at the time of issuance of the contract