Press Release

Nestimate Debuts Software Solution for In-Plan Guaranteed Income Products

Issued by Newtimate, Inc.

Apr. 4, 2023

Software billed as giving plan advisors, consultants and sponsors a scalable way to implement lifetime income into retirement plans

Nestimate, Inc, a software analytics platform empowering retirement income solutions, today announces the launch of its first software tool, “Nestimate.” Kelby Meyers NestimateNestimate’s Kelby Meyers

Nestimate is designed to help fiduciaries overcome the initial hurdles of in-plan retirement income solutions. This software gives advisors, consultants, and plan sponsors a scalable way to implement lifetime income.

In announcing the software’s debut, Kelby Meyers, CEO of Lincoln, Neb.-based Nestimate said the expansion of the Safe Harbor provision surrounding lifetime income in the SECURE Act of 2019 and a seismic demographic shift underpins the growing interest. As a result, the idea of income in-plan is picking up steam and can be a differentiating value creation for plan advisors and consultants.

“We are at the precipice of a new era in retirement,” Meyers said. “The greatest risk to a retiree today is not the market, it is not inflation, and it is not Silicon Valley Bank. The greatest risk a retiree faces is running out of money before they run out of life. As more participants remain in-plan, it will be critical for plan fiduciaries to address their longevity risk.”

Meyers highlighted a few of the software’s key features:

• A succinct due diligence workflow which guides the user through a prudent process and intuitively adheres to SECURE Act.
• Unique digital and physical documentation of diligence process.
• Powerful product recommendation algorithm which captures the best interest of the participants.
• Appropriately compares benefits in respect to fees with a one-of-a-kind method to compare fees.
• Proprietary and actuarily developed modeling to more accurately portray the value of lifetime income products.
• Ongoing monitoring in adherence with the SECURE Act requirements.

Nestimate’s proprietary process was vetted by several leading ERISA attorneys, including Marcia Wagner and John Sohn of the Wagner Law Group. Their recent opinion states, “the (Nestimate) Analytics Tool is reasonably designed to assist Financial Professionals who are Fiduciary Advisors to their Plan clients in providing annuity selection advice (i.e., annuity product recommendations) to their respective Plan clients that comport and are consistent with their Duty of Prudence as Plan fiduciaries under ERISA Section 404(a)(1)(B).”

In his view, Meyers said it makes sense that a retirement plan has a plan for retirement income, whether that includes a product with guarantees or not. “While it may be new and novel, it would not surprise me that within the next decade every plan in the country has an in-plan retirement income option,” Meyers said.

Nestimate points to widespread academic research that has long concluded that having part of a portfolio in a guaranteed income solution can improve retirement outcomes. “This is where we believe the SECURE Act was a game-changer. The ability for participants to access institutional guaranteed income products under a fiduciary oversight is a big win,” Meyers said.

Many think the SECURE Act and SECURE 2.0 will provide a launch pad for in-plan annuities in much the same way the Pension Protection Act of 2006 (PPA) gave rise to the QDIA and Target Date Funds.

“Organic guaranteed assets and participants doubled on the SS&C Retirement Income Platform (RICC) in 2022 and we expect guaranteed assets to double again in 2023,” said Jacqueline Rynn, Head of Product Development, Income Solutions at SS&C Retirement Solutions. “SS&C believes guaranteed retirement income solutions will continue to gain traction as new, innovative solutions come to market and recordkeepers roll out their strategies on how to bring guaranteed retirement income solutions to plan sponsors and participants.”

While only time will tell if it will have that kind of reach, there’s no doubting retirement income is now top-of-mind for entire industry.

“Right now, approximately 10% of plans have any sort of option for guaranteed income,” Meyers said. “It is our belief that it won’t be long until these solutions are considered table stakes for retirement plan advisors and providers.”

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