"Putting them together in one package enables investors to build a customized retirement solution to fit their needs," he said.
"From a product development perspective," Michalowski said, "it's important to understand the needs driven by the demographics of your consumer in order to provide solutions that will help folks with their retirement income planning. There is a need for guaranteed income solutions to become part of a consumer's portfolio for retirement planning, and we're trying to fulfill that need." The annuity product is distributed through third-party intermediary relationships, he noted.
Ohl pointed out the 401(k) plan's key role in retirement planning and said her firm is working closely with both plan sponsors and employers, encouraging them to step up investor education and get more employees to contribute to their plans. Though contributions have fallen previously, they are beginning to rise "as people see a greater need for more money for retirement," she said.
As evidence, she noted that 66% of U.S.-based assets for retirement today are lodged in such plans, an amount second only to Australia.
"Though we've gone through difficult times," she said, "it's important to educate people not to stop investing." More than 50% of plan sponsors currently provide investment advice, she noted.
In response to a question about how to get younger employees to contribute, Ohl said a key tool is the automatic enrollment feature, by virtue of the Pension Protection Act. "We are seeing employers helping younger employees by starting auto enrollment at higher rates, 4%-5%, and leveraging auto deferral increases up to 12-15%," she said.
Joseph F. Coughlin, founder and director of the Massachusetts Institute of Technology AgeLab, discussed some lessons learned from the financial crisis. Since people are living longer today and under greater duress, retirement should be defined more in terms of longevity and should start even before the teenage years, Coughlin believes.
"We should think about longevity as part of the education process from grade school and up," since the fastest growing portion of the population today is people 85 and older, Coughlin said.
Bruce W. Fraser is a financial writer and author based in New York City and a frequent contributor to Financial Advisor magazine. He can be reached at [email protected]. Visit him at www.bwfraser.com/home.