21.04.2020 10.06 GMT+0000
403(b) plan sponsors have reasons to move away from the traditional on-site representatives. Changes in how we work as the result of the COVID-19 pandemic may provide these sponsors the opportunity to make a change.
Insurance companies play an outsized role in delivering 403(b) plans. COVID-19 may change that.
Insurance companies (and annuities) play a far greater role in delivering 403(b) plans than in the 401(k) market---and the sale of annuities through these plans is far more lucrative than recordkeeping a plan dominated by mutual funds. In order to successfully sell these annuities, insurers rely on on-site representatives. However, these representatives may not act in participants’ best interests. Changes in how we work as the result of the COVID-19 pandemic --with an increased reliance on on-line resources--may provide plan sponsors the opportunity to revisit the current delivery model.