Time & Attendance
Prevent Call Outs
Implementation & Launch
By Patty Kujawa
Jan. 10, 2018
United Technologies Corp. said it has the pension for the 21st century built into its 401(k) plan. It’s called lifetime income, and United is one of the few companies that automatically enrolls workers into the option.
About five years ago, the Connecticut-based aircraft maker reviewed its investment plan options and decided it wanted to offer workers a product that would give them a paycheck for life. The company embedded a lifetime income product into its target-date funds. Participants in these funds would see their assets slowly convert from traditional investments to lifetime income products by the time they hit retirement age.
[Also read: “Employers Slow to Respond to Boomer Calls for Lifetime Income Plans”]
Since June 2012, all new hires are automatically invested in the strategy. Today, United has more than 29,000 participants with $1 billion in its lifetime income fund.
“As our default, we are automatically securing the future retirement of our new employees,” Kevin Hanney, United’s senior director for pension investments said in a recent discussion with industry group Institutional Retirement Income Council.
IRIC Executive Director Bob Melia said employers who want their 401(k) plan to be a better HR tool should follow United’s design. Because of the paycheck for life, this option gives workers financial security — the kind of security workers used to have with defined-benefit pensions. Studies have shown that workers who are less stressed about their finances tend to be better at their jobs.
Melia and Hanney agree that companies need to look at their current plans to figure out whether it is meeting the objectives set out for the 401(k). Hanney added that advisers should become more familiar with the lifetime income because so many plan sponsors are interested.
“If employers engage in a thoughtful risk/reward analysis of a retirement income product for their plan, most would find that the rewards for their employees outweigh their costs,” Hanney said.
Patty Kujawa is a freelance writer in the Milwaukee area. Comment below or email email@example.com.
Schedule, engage, and pay your staff in one system with Workforce.com.
federal law, minimum wage, pay rates, state law, wage law compliance
Staffing Management4 proven steps for tackling employee absenteeism
absence management, Employee scheduling software, predictive scheduling, shift bid, shift swapping
Time and Attendance8 ways to reduce overtime and labor costs
labor costs, overtime, scheduling, time tracking, work hours
Don't miss out on the latest tactics and insights at the forefront of HR.