Lump-Sum Window Services
Make the best decision for your company
Offering a lump-sum window to plan participants might be the right decision for your company. However, this process takes time and should be implemented with discretion.
Our experts will guide you through the entire lump-sum window process. We know that offering a lump sum window to employees isn’t a one-size-fits all process, which is why we tailor our services to meet your company’s specific needs.
Our services
Whether you’re looking to achieve greater flexibility and control over your retirement liabilities, enable employees to customize their retirement income strategy or better mitigate long-term pension plan risks, our comprehensive lump-sum window services can help.
Initial assessment
By conducting an initial assessment of your company’s pension plan, we’ll evaluate specific features, funding status and the potential impact of offering a lump-sum window payout.
Risk management
Financial modeling
We’ll use sophisticated financial modeling techniques to simulate the impact of implementing a lump-sum window payout on your plan's financials, including the funding level, cash flow projections and potential future obligations.
Participant communications
Effective participant communication is crucial when implementing a lump-sum window payout. We can assist in developing clear and informative communication materials to educate plan participants about the option, its benefits, potential risks and any associated considerations.
Lump-sum calculation
We’ll calculate lump-sum amounts for your eligible participants based on actuarial principles, plan rules and participant-specific factors such as age, years of service and projected life expectancy. These calculations ensure that the lump-sum payouts are fair and accurately reflect the value of your participants' benefits.
Monitoring and review
After implementing the lump-sum window payout, we can help your business monitor the impact and effectiveness of the program. We’ll provide ongoing analysis, evaluate the outcomes and suggest adjustments or refinements as needed.
How it works
Phase 1: Initial announcement
Clear and thoughtful communication is crucial for participants to understand their choices and what they mean — it’s also the key to achieving a higher "take rate" and a more profitable lump sum project. In this phase, we create announcement letters that can be sent via email or postal service and include
information about accrued benefits, annuity options, and next steps.
Phase 2: Calculation
Next, we determine the dollar amount of each participant’s lump sum. Once we receive the necessary participant and plan documentation, we can calculate initial accrued benefits, accrued benefits after changes in data, the participant qualified domestic relations order (QDRO), alternate payee options and survivor benefits.
Phase 3: Lump sum window execution
Our main priority is ensuring that participants receive their payments. After verifying and auditing the elected benefits, we can ensure the payment instruction is sent to the paying agent, lump sum and annuity elections are transmitted, and payments are reconciled.
Phase 4: Ongoing support
Our job doesn’t stop here – we offer continuous support even after the lump sum window process is complete. Our team of dedicated pension experts are on call to answer questions about benefits, provide support in collecting and mailing election kits, and communicate with participants.
Lump sum window FAQs
What are the benefits of offering a lump-sum payout option to employees?
+Offering a lump-sum payout option can provide flexibility to employees, allowing them to access their retirement savings in a single, upfront payment. It also helps employees manage their financial needs, provides a sense of control over their retirement funds and potentially reduces long-term liabilities for your company.
How can October Three assist in implementing a lump-sum payout option?
+As specialists in lump-sum implementation, we will guide you through the entire process. We will assess the feasibility of offering lump sums, determine eligibility criteria, calculate lump-sum amounts, handle legal and regulatory compliance, communicate the option to employees and provide ongoing support throughout the implementation.
Are there any legal considerations or compliance requirements associated with offering lump-sum payouts?
+Yes, offering lump-sum payouts involves legal considerations and compliance requirements. We will help ensure compliance with pension and tax laws, provide guidance on regulatory filings and disclosures, address employee consent requirements and assist with any necessary documentation to meet legal obligations.
How will you determine the appropriate lump-sum amount for my company and employees?
+We use actuarial calculations and other relevant factors to determine appropriate lump-sum amounts. We consider factors such as the employee's age, length of service, retirement benefit formula, interest rates and mortality assumptions to arrive at a fair and equitable lump-sum payout value.
Can you assist with employee education and communication about the lump-sum option?
+Yes, with your company, we will develop comprehensive employee education and communication strategies. We can provide educational materials, create personalized retirement projections and address individual employee questions to ensure employees clearly understand the lump-sum option and its implications.
Are there any risks associated with offering lump-sum payouts?
+While lump-sum payouts offer benefits, there are also risks to consider. We can help you assess and manage these risks. Risks typically include potential underfunding, fluctuating interest rates impacting lump-sum values, employee longevity risk and potential legal or regulatory changes which may affect lump-sum calculations.
Can you provide ongoing administration and support after implementing lump sum payouts?
+Yes, we can provide ongoing administration and support services, including lump-sum calculation assistance, managing updates to mortality assumptions and interest rates, addressing employee inquiries and ensuring compliance with changing regulatory requirements.
How will offering a lump-sum payout option affect my company's overall pension plan liabilities?
+A lump-sum payout option can reduce your company's pension plan liabilities. Your company's long-term liabilities may decrease by transferring the responsibility of providing future annuity payments to employees. We can help you evaluate the financial impact and assess the potential liability reduction.
What considerations should we keep in mind when considering lump-sum payouts?
+Some key factors to consider when deciding include the financial impact on the company, potential risks and costs, employee preferences and demographics, regulatory compliance and the company's long-term retirement benefit strategy. We can conduct a comprehensive analysis and guide you to make an informed decision.
How long does it take to implement a lump-sum payout option?
+The timeframe can vary depending on the pension plan's complexity and the company's specific needs. We will assess your situation and provide you with an accurate timeline.
Ready to get started?
Implementing a comprehensive lump-sum window payout is a time-intensive and sensitive process. Our expert actuaries help you achieve your goals with maximum efficiency while eliminating volatility concerns.
Reach out to schedule a meeting about a lump-sum window solution tailored to your business and employees.