What is the difference between this and any other annuity?
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It's in a 401k?What is the difference between this and any other annuity?
not sure that is true as there is new DIA products inside 401k plans & this Blackrock sounds alot like the Principal offering.Lifetime Income funds are not new. They have been around the 401k world for a while.
Its not an annuity because its not insurance. There are no reserves backing the promises made. And no ratings that speak to the solvency of that companies claims paying ability.
Its using an allocation algorithm to ladder bonds and equities to provide lifetime income. Very heavy on the bonds... which provides the guarantees.
lots of differences.What is the difference between this and any other annuity?
not sure that is true as there is new DIA products inside 401k plans & this Blackrock sounds alot like the Principal offering.
Flexible contributions & transfers in the 401k into the DIA to build future income. But unlike most DIA available to consumers in the market, it isnt making you decide at time of purchase what year you will begin the lifetime income start date.
Here attached is the Principal Pension builder offering I was just emailed yesterday. Have not fully studied it, but I believe it is a form of DIA/DIA rider attached to the group annuity contract offering within the plan offering. I dont think it is an algorithm of hypotheticals, I believe it is an actual insurance contract with contractual guarantees inside the plan, but I could be wrong.
Guessing these product designs are a result of some of the legislation the last few years that opened the doors to more annuity offerings inside employer plans. Also the result of employer & plan committee having more fiduciary exposure, so not offering guaranteed lifetime income could be an exposure for litigation for the plan
Looks like Blackrock offering is very similar to Principal & Blackrock has chosen Brighthouse & Equitable as the insurance carriers for the DIA offering.
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Fair enough, but the Black Rock plan clearly requires the oranges to become oranges for the guaranteed lifetime income. Maybe more of a SPIA when annuitized woth the 2 insurers Black Rock has chosen to be the income annuity component. I thought it looked alot like the Principal DIA offering I had seen the day before.We are not talking about DIAs.
The post was about Mutual Funds.
The BlackRock LifePath Paycheck is a Mutual Fund that is essentially built on a Target Date fund chassis.
There is zero annuity component to it, and it has nothing to do with new regulations allowing DIAs in QPs.
And these types of Mutual Funds are not new in the QP world. They have been around for at least the past 7 years now. I personally manage 401k plans that include funds such as this (LFG was one of the first to offer this).
You are talking about oranges when the original convo is about apples.
Have you ever seen what financial companies call "new" and "revolutionary"?Lastly, of this is nothing new, why the Black Rock announcement of their new offering? Even the CEO calls it revolutionary in the media announcement, that gave me the impression it is something completely new