Producer Connection is Standard Insurance Company's bi-monthly online newsletter for Employee Benefits producers.
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Producer Connection is Standard Insurance Company's bi-monthly online newsletter for Employee Benefits producers.
Let us know what you think of Producer Connection and how we can make it better.
The Center for Retirement Research at Boston College recently reported that more than 40 percent of working age households "are at risk of being financially unprepared for retirement at age 65."*
If a comfortable retirement is at risk for so many workers, imagine the difficulties faced by disabled workers who no longer have the financial means or opportunity to fund a retirement plan.
The Standard’s Annuity Contribution Benefit (ACB), an optional Group LTD feature, helps bridge the retirement savings gap created by long-term disability. With the ACB option, when a covered employee has been disabled for three or more years, The Standard will set up and begin funding an individual annuity in the employee’s name. The disabled employee owns the annuity, even though it is funded by The Standard.
So, why fund an individual annuity? A big strength of the ACB is its versatility. It’s available to groups with or without employer-sponsored retirement plans. It’s also available to all employees, whether or not they participate in a company retirement plan. And individual annuities are not bound by IRS regulations that limit the funding of qualified retirement plans, like a 401(k), on behalf of disabled employees.
One issue to consider is taxability of the benefit. Offering an LTD plan with ACB on a fully contributory basis is an option for dealing with this issue. For more details about ACB and options for making it work for your clients, contact your Sales Rep.
* Retirements at Risk: A New National Retirement Risk Index, June 2006, Center for Retirement Research at Boston College, p. 2.