DST Systems has designed a new program, Retirement Income Clearing Calculator, which will widely distribute retirement income products to sponsors and participants of defined contribution plans.
This middleware application is designed specifically for supporting guaranteed retirement income products through traditional recordkeeping platforms. Guaranteed income products often pose distribution challenges because they combine characteristics of both investment and insurance products. Previously, insurance carriers could only offer guaranteed income products in 401(k) plans except through their own policy administration systems.
“Current recordkeeping programs simply aren’t suited to handle the attributes of these new offerings,” said Larry Kiefer, systems officer for DST Systems. “RICC is specifically designed to meet these new demands.”
DST designed RICC to handle a broad array of income products: the platform can incorporate any number of functions in order to deliver an income product to the market. The middleware can incorporate all of the rules concerning a guaranteed product, but can also handle mutual funds.
"All of the intelligence that went into building RICC creates a dynamic, innovative place to deliver income resolutions," said Kiefer. "We see it as the platform-of-choice for retirement income products and the perfect industry-wide answer for product manufacturers looking to create and deliver income products more efficiently," h added.
Insurance and financial management provider The Hartford was the inaugural client for RICC. The Hartford uses the system to support its Lifetime Income product, which the insurer launched last fall.
"Retirement plan sponsors and participants are looking for new products that provide retirement income that is predictable, guaranteed and easy to understand," said Patricia Harris, vice president, product management for The Hartford's Retirement Plans Group. “DST’s RICC enables innovative products like Hartford Lifetime Income to be technologically supported in a way that enhances portability.”
Tommy Fernandez writes for Money Management Executive.