Jen DeLong: As we talk about these lifetime income solutions and DC plans, do you think that more plan sponsors, as they think about adopting these solutions, may begin to want to keep the participants in their plans longer? Seems to be the way that they’re designed.
Andrew Stumacher: Yeah, I think there’s a lot of benefits in doing so. So, plan sponsors can get, really get the scale that they can use to negotiate better pricing with all the different vendors who are providing a service to the plan. As well as they really can control the experience a lot better for the participants. Participants tend to trust their employer and [the] employer is pretty high up on the trustworthiness scale. So, when the employer offers a plan, those participants are more likely to listen and heed that advice and can save more and be able to retire. And so, there’s definitely benefits to offer something in plan.
JD: There are a lot of different ways to deliver retirement income solutions within a DC plan. What do you think the sort of method of introducing or implementing a solution should be that would really lead to the most chance of success?
AS: Far and away, it has to be as a default solution. Sort of, from a responsible perspective, why go through all the effort of rolling out a great retirement income program only to see inertia cause participants not to take any action whatsoever. Let’s kind of use that to our advantage. And just how we did with auto-enrollment and auto-escalation, let’s auto-enroll people into a lifetime income feature that, should they decide it’s not right for them and their situation, they can always roll out of. But if it’s part of the program that we communicated to the entire population, it’s going to be good for about 80% or so of the population and we have all of a sudden, a great retirement program that’s helping people to get where they need to be.
JD: I agree. I think we’ve learned from past experience that if it’s not implemented through the QDIA or through the default, it will not be as adopted by participants as the plan sponsors [are] going to want it to be.