What types of insurance guarantees are available?
Schaus: Sponsors are evaluating a number of guarantee products, such as fixed and variable annuities, including guaranteed minimum withdrawal products. In addition, longevity insurance is gaining interest. My informal survey of plan sponsors at recent conferences found that while few of them currently have these types of products, a majority is considering adding them in the next year or two. Yet, many sponsors say they are concerned with guarantee product fees and complexity as well as fiduciary oversight – these concerns need to be addressed over the coming years to help more sponsors move forward with such programs. Q: How is PIMCO helping clients who have concerns about DC assets? Schaus: We’re helping many of our clients evaluate their current asset allocation structures, including evaluating the probability of the plan meeting real retirement income replacement goals, and the ability to minimize volatility and other risks in the plan. We offer our clients as well as the consultin
Insurance of this type is often utilized as a means of attracting potential investors, since the coverage greatly increases the chances of recovering their full investment in the event of a default on the security.
