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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance explores the challenges presented by today's business and economic upheaval, as well as the hardening insurance market, and what it means for the captive insurance industry.

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Captive Insurance Role in Employee Retirement Services Explored

Retirement Planning
September 12, 2016

The July 2016 issue of Milliman's Benefits Perspectives: Current Issues in Employee Benefits features two excellent articles on helping employees with their retirement plans.

The lead article in the issue is written by Jinnie Olson, a Milliman consultant in retirement plan management. She suggests employers should design a plan with effective saving options, postretirement distribution options, and appropriate education during a participant's active employment, which are three key pieces for an employer (plan sponsor) to successfully help employees into retirement. The article details 401(k) plan design options at retirement, the benefits and options of maintaining retired or terminated retirement account balances, and one-time distribution options. The Milliman article also outlines the considerations for retirement plan Roth conversions where they can be beneficial for select employees.

One of the issues employees face is the calculation of retirement withdrawal rates. In the second article, Matt Kaufman, director of marketing for Milliman Financial Risk Management, describes a five-step process for determining a sustainable withdrawal rate.

1. Retiree confidence level identification

 2. Asset allocation determination

 3. Rate of return calculation for planning purposes

 4. Planning horizon determination

 5. Sustainable withdrawal rate calculation

"Plan sponsors have a tremendous opportunity to serve retiring 401(k) participants by providing them with intelligent tools to help them safely provide for themselves when they no longer work, and solutions that seek to address major risks faced by this group," Mr. Kaufman concludes in the article.

As captives venture into providing employee benefit coverages, including selected retirement benefit financing, is there a role captives can play in providing employee retirement services for captive owners?

Find the July 2016 issue of Benefits Perspectives: Current Issues in Employee Benefits on Milliman's sponsor profile page on 

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