Income Accumulation

As traditional pensions are phased out of the retirement landscape, it’s important to remember the basic features that once made those plans the foundation of retirement security in America: the annual accrual of deferred income, during the working years, that was guaranteed for life during retirement.

The essence of traditional pensions included:

• An employer contribution into a trust on behalf of all or most employees.
• The amount was designed to cover at least the value of new benefits earned that year.
• A pension accrual was based on a year of service and pay (if the pension formula was pay-related).
• Intent to gradually replace a portion of employees’ paychecks with lifetime retirement income.

At ANNUA, we believe the accrual, or accumulation, concept of the traditional pension can be applied to lifetime income from defined contribution plans.  We are working to transform 401(k)/403(b) plans to include Accumulation Annuities that create pension-like accruals but are backed by highly rated insurance companies, without the financial risks or long-term obligations for the employer.  This will help retirees address the myriad of financial risks of a lengthy retirement and provide employers a mechanism for better workforce management.