News from IBM and the shift towards lifetime income alternatives to 401(k)s

  • Recent news from IBM and growing interest in converting 401(k)s into lifetime income may lead to a resurgence of pensions
  • IBM will stop its 5% employee match in its 401(k) and offer a new Retirement Benefit Account with a guaranteed return
  • The Retirement Benefit Account provides stability and guaranteed income for IBM retirees
  • More employers are considering offering options to convert 401(k) balances into lifetime income
  • Employers want to retain funds in 401(k)s and stem the outflows into IRAs

The retirement pension, once a staple of Americans’ retirement income, has been on the decline since the 1990s. However, recent developments suggest that pensions may be making a comeback. IBM’s announcement of a new retirement benefit, the Retirement Benefit Account, has sparked speculation that other companies may follow suit. This new account offers a guaranteed return and provides stability and guaranteed income for retirees. Additionally, there is growing interest in converting 401(k) balances into lifetime income, mimicking the benefits of a pension. Employers are considering these options to retain funds in 401(k)s and prevent outflows into IRAs. While the resurgence of pensions may not be widespread, the shift towards lifetime income alternatives is gaining traction.

Public Companies: IBM (IBM), Vanguard (Vanguard), Prudential (Prudential), T. Rowe Price (TROW), RTX (RTX), Raytheon Technologies (RTX)
Private Companies:
Key People: Jared Gross (J.P. Morgan Asset Management), Michael Buchenholz (J.P. Morgan Asset Management), John Lowell (October Three Consulting), Robert Massa (Qualified Plan Advisors), Will Hansen (Plan Sponsor Council of America), Dylan Tyson (Prudential Retirement Strategies), Jessica Sclafani (T. Rowe Price)

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Factuality Level: 7
Justification: The article provides information about the current state of pensions and retirement benefits in the United States, including the decline of traditional pensions and the potential resurgence of pensions through IBM’s new retirement benefit. It also discusses the trend of converting 401(k) balances into lifetime income. The information provided is generally accurate and supported by quotes from experts in the field. However, the article does not provide a comprehensive analysis of the topic and could benefit from additional data and research.

Noise Level: 6
Justification: The article provides information on the current state of retirement plans in the US and discusses the potential resurgence of pensions. It also explores the possibility of converting 401(k) balances into lifetime income. However, the article lacks in-depth analysis and does not provide actionable insights or solutions.

Financial Relevance: Yes
Financial Markets Impacted: The article discusses retirement plans and the potential resurgence of pensions, which could impact financial markets and companies in the retirement industry.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article primarily focuses on retirement plans and the potential changes in the industry, without mentioning any extreme events or their impacts.

Reported publicly: www.marketwatch.com