Defined terms for the annuity market and lifetime income landscape.
Investment menu design is the fiduciary process by which a defined contribution plan sponsor and its designated fiduciaries select, structure, and monitor the set of investment options offered to participants, including the default and the options for participants who make affirmative elections.
An investment policy statement is a written document adopted by a plan's fiduciaries that sets out the plan's investment objectives, the criteria used to select and monitor plan investments, and the procedures the fiduciaries will follow in exercising their investment-related duties.
A rollover is the transfer of an eligible retirement account balance from one tax-preferred account to another — plan to plan, plan to individual retirement account, or IRA to individual retirement account — completed in a way that preserves the balance's tax-deferred status.
Lifetime income as a QDIA is the arrangement of a defined contribution plan investment option that combines lifetime income guarantees — typically through a guaranteed lifetime withdrawal benefit — with the mechanics required to qualify as a qualified default investment alternative under ERISA.
The lifetime income disclosure requirement is the SECURE Act mandate that defined contribution plan sponsors provide participants at least annually with an illustration of the lifetime annuity income their current account balance could produce.
