Lincoln PathBuilderSM Enables Retirement Savers to Turn
401(k) Savings into Retirement Income
Lincoln Financial Group (NYSE: LNC) today announced the launch
of the Lincoln PathBuilderSM in-plan guaranteed income option,
which will help ensure Americans won’t outlive their savings by
expanding the opportunities for lifetime income in
employer-sponsored retirement plans. As the availability of
pensions decreases and more retirement savers are concerned about
market volatility, Lincoln PathBuilder makes it possible to turn
defined contribution retirement plan savings into a monthly check
for life.
The SECURE Act made it easier for plan sponsors to provide a
plan design that can generate guaranteed income for their
participants in retirement. As a result, employer-sponsored
retirement plans can become more than an accumulation vehicle —
they can provide a stream of income in retirement, so that
participants have the potential to receive income regularly for the
rest of their lives. And among workers currently saving in their
employer’s defined contribution plan, 61% would be somewhat or very
likely to contribute to a guaranteed lifetime income investment
option1.
“As an industry, we’ve focused on ensuring that retirement plan
participants know they need to work to save enough for the
retirement they envision,” said Jamie Ohl, Executive Vice
President, President, Retirement Plan Services, Head of Life &
Annuity Operations, Lincoln Financial Group. “And while that is the
important first step in building a financially secure future, we
must also now focus on helping those participants translate their
savings into a monthly check that will last through retirement —
because in planning for retirement, the ultimate outcome is
income.”
Protection from Market Volatility
In times of economic uncertainty, retirement savers consider
their retirement savings as the most important area of their
finances to protect, ahead of their income, maintaining their
current lifestyle, other large assets and more. And as a result of
the financial impacts of COVID-19, half of retirement savers are
more concerned about future market volatility than they were before
the pandemic2.
This concern for future volatility is increasing awareness of
products that offer guaranteed income, with a quarter of retirement
savers saying the COVID-19 pandemic has made them more interested
in these types of investment products3.
With Lincoln PathBuilder, participants can protect their savings
from market declines while also benefitting when the market goes
up, because of the way the “Income Base” is calculated. When
participants invest their first dollar in the Lincoln PathBuilder
investment option, their Income Base — how much they have invested
— is set on that date. As the market goes up, the Income Base is
reset annually once a year. If the market drops, the Income Base
does not go down4.
Guaranteed Lifetime Income
Millennials are the largest generation in the workforce, but
only 21% believe they’ll be able to rely on a pension and only half
think Social Security will be a source of income in retirement. For
Gen-X, approximately two-thirds say they will rely on Social
Security and 28% expect pension plans to be sources of income in
retirement, while 87% of Baby Boomers are looking to Social
Security for retirement income and 41% of them expect pension plans
to serve as income as well5. As a result, there is an increasing
need for investment options that will provide a stream of income
for life.
With Lincoln PathBuilder, plan sponsors can add the income
investment option to a plan similar to the way they would add any
other investment, or as part of a custom target-date portfolio.
With a custom target-date portfolio, the account balances will
automatically transition, over time, to an investment that can
provide lifetime income. Participants can then choose to take this
as a regular check that will last throughout their retirement to
help ensure their basic expenses are covered.
Flexible, Portable, Affordable
Savers will always have full access to their account balance, as
well as the flexibility to choose when they want to start receiving
lifetime payments, with Lincoln PathBuilder. The investment is
fully portable, so participants can face their future with
confidence and optimism, even if they move to a new job or their
retirement plans change. In addition, by offering a product that is
scaled for large retirement plans, the end result is an affordable
solution that can be embedded within a plan that leverages
automatic design features.
“We are focused on helping Americans automatically transition
their retirement account balances into guaranteed income for
life as we create a next-generation auto feature: auto income,”
said Ralph Ferraro, Senior Vice President, Retirement Plan Products
& Solutions, Lincoln Financial Group. “Over the coming months,
we will continue to build out our suite of Lincoln PathBuilder
products, as we are committed to product innovation that meets
market needs, building on our foundation of financial strength and
industry expertise.”
About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help
empower people to take charge of their financial lives with
confidence and optimism. Today, more than 17 million customers
trust our retirement, insurance and wealth protection expertise to
help address their lifestyle, savings and income goals, as well as
to guard against long-term care expenses. Headquartered in Radnor,
Pennsylvania, Lincoln Financial Group is the marketing name for
Lincoln National Corporation (NYSE:LNC) and its affiliates. The
company had $247 billion in end-of-period account values as of
March 31, 2020. Lincoln Financial Group is a committed corporate
citizen included on major sustainability indices including the Dow
Jones Sustainability Index North America and FTSE4Good. Dedicated
to diversity and inclusion, Lincoln earned perfect 100 percent
scores on the Corporate Equality Index and the Disability Equality
Index. Lincoln has also been recognized in Newsweek’s Most
Responsible Companies and is among Forbes’ World’s Best Employers,
Best Large Employers, Best Employers for Diversity, Best Employers
for Women and ranked on the JUST 100 list. Learn more at:
www.LincolnFinancial.com. Follow us on Facebook, Twitter, LinkedIn,
and Instagram.
LCN-3157483-070920
1 Lifetime Income: Do workers want options in their plans?
Secure Retirement Institute, October 2019
2 Lincoln Financial & CivicScience Protection Survey. Data
gathered by CivicScience: 6/18/2020 – 6/25/2020
3 Lincoln Financial & CivicScience Protection Survey. Data
gathered by CivicScience: 6/18/2020 – 6/25/2020
4 The Income Base is not a cash value and may differ from the
Account Balance in the event of market fluctuations.
5 LIMRA Secure Retirement Institute, Retirement Income Reference
Book, 4th Edition, 2019
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Lincoln Financial Group Lucy MacNichol 484-655-4410
Lucy.MacNichol@lfg.com
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