)
Lump-Sum Window Services
Make the best decision for your company
Offering a lump-sum window to plan participants might be the right decision for your company. However, this process takes time and should be implemented with discretion.Our experts will guide you through the entire lump-sum window process. We know that offering a lump sum window to employees isn't a one-size-fits-all process, which is why we tailor our services to meet your company's specific needs.
)
Our Services
Whether you're looking to achieve greater flexibility and control over your retirement liabilities, enable employees to customize their retirement income strategy or better mitigate long-term pension plan risks, our comprehensive lump-sum window services can help.
By conducting an initial assessment of your company's pension plan, we'll evaluate specific features, funding status and the potential impact of offering a lump-sum window payout.
We'll identify and evaluate the risks associated with offering a lump-sum window payout — including interest rate sensitivity, longevity risk and potential participant adverse selection — and provide strategies to mitigate their impact on your plan's long-term stability.
We'll use sophisticated financial modeling techniques to simulate the impact of implementing a lump-sum window payout on your plan's financials, including the funding level, cash flow projections and potential future obligations.
Effective participant communication is crucial when implementing a lump-sum window payout. We can assist in developing clear and informative communication materials to educate plan participants about the option, its benefits, potential risks and any associated considerations.
We'll calculate lump-sum amounts for your eligible participants based on actuarial principles, plan rules and participant-specific factors such as age, years of service and projected life expectancy. These calculations ensure that the lump-sum payouts are fair and accurately reflect the value of your participants' benefits.
After implementing the lump-sum window payout, we can help your business monitor the impact and effectiveness of the program. We'll provide ongoing analysis, evaluate the outcomes and suggest adjustments or refinements as needed.
How it works
Phase 1: Initial Announcement
Clear and thoughtful communication is crucial for participants to understand their choices and what they mean — it's also the key to achieving a higher "take rate" and a more profitable lump sum project. In this phase, we create announcement letters that can be sent via email or postal service and include information about accrued benefits, annuity options, and next steps.
Phase 2: Calculation
Next, we determine the dollar amount of each participant's lump sum. Once we receive the necessary participant and plan documentation, we can calculate initial accrued benefits, accrued benefits after changes in data, the participant qualified domestic relations order (QDRO), alternate payee options and survivor benefits.
Phase 3: Lump sum window execution
Our main priority is ensuring that participants receive their payments. After verifying and auditing the elected benefits, we can ensure the payment instruction is sent to the paying agent, lump sum and annuity elections are transmitted, and payments are reconciled.
Phase 4: Ongoing support
Our job doesn't stop here – we offer continuous support even after the lump sum window process is complete. Our team of dedicated pension experts are on call to answer questions about benefits, provide support in collecting and mailing election kits, and communicate with participants.
Frequently Asked Questions
Offering a lump-sum payout option can provide flexibility to employees, allowing them to access their retirement savings in a single, upfront payment. It also helps employees manage their financial needs, provides a sense of control over their retirement funds and potentially reduces long-term liabilities for your company.