Defined Contribution Plan

A defined contribution plan (DC) is a pension plan such as a 401(k) where the plan participant such as an employee assumes responsibility for directing plan assets among various investment options. In contrast to a defined benefit plan, the participant assumes market risk under a defined contribution plan. In addition, the participant assumes responsibility for converting accumulated assets into a stream of income when they retire. In other words, assets need to accumulate during working years and then the participant is responsible for figuring out what to do with that sum of money when they retire. The number of defined contribution plans has increased significantly over the past 20 years.

Senate Bill 2832 Could Transform Retirement Income Market

While an initial step, Senate bill 2832 could set the course for significant changes in the retirement income industry. The bill would amend the Employee Retirement Income Security Act (ERISA) which governs defined contribution plans such as the 401k . Plan sponsors would be required to provide plan participants with an annual statement that shows what the value of their retirement account would be in terms of guaranteed monthly payments--in other words, annuity payments . The bill is intended...

The Business Week Cover Story on Retirement--Life-Cycle in Theory but Status Quo in Practice

Business Week just ran a timely cover story on the post-financial crisis retirement landscape.  Portions of the feature present a remarkable contradiction. While there is a clear endorsement of...


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Great-West Life and Annuity Insurance Company

Company Type: 
Insurance Company
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8515 E. Orchard Road
Greenwood Village
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The Pitfalls of Using Group Annuities as a Wrapper for 401k Plans

A very good article in Forbes magazine discusses the many downsides of using group annuity contracts as a wrapper for 401k plans. This is not to be confused with 401k or defined contribution plans that offer an annuity option within their plans or an annuity option outside of the plans to participants who are retiring or leaving the company. In fact, most of the group annuity wrappers provide no ability to annuitize . The practice is especially common among 401k plans offered by smaller...