The retirement industry is abuzz with the hot topic of adding an annuity option to a 401(k) plan with the goal of creating lifetime income for your employees. To many this is a very new concept, right?

Well, no, it isn t. In the past many employers sponsored traditional defined benefit (DB) pension plans, which provided much the same type of benefit: a stream of lifetime income at retirement, with the flexibility of a variety of payment options. The 401(k) plan was created in the 1980s to supplement the pension plan, enabling employees to make additional pretax deferrals to these plans. So, as you can see, we've had this type of benefit in the past.

Fast forward to today when, by combining a traditional defined benefit pension plan with your 401(k) plan, you ve just created a balanced investment program for your employees.

You might consider the pension as the fixed-income portion of a portfolio generating stable returns and the 401(k) plan as the equity portion offering the potential for growth with some volatility. Wouldn t that make a nice balanced investment portfolio?

So, the Combined Pension/401(k) Program provides lifetime income and a balanced type of portfolio for your employees, in addition to the other enhanced features of the traditional pension plan.

Wouldn't it make sense to pair your 401(k) plan with a defined benefit pension plan?