Unlock better outcomes for your retirement plan
Tap into the full potential of your retirement program. O3 PRIME maximizes employee retirement outcomes while minimizing employer costs.
America is in an unprecedented retirement crisis
Many older Americans face a dire problem: they're nearing retirement age without sufficient retirement income. With the average lifespan increasing, retirees are worried about outliving their savings.
The shift from defined benefit (DB) plans to defined contribution (DC) plans is the catalyst behind the problem. Without a pension plan providing a guaranteed lifetime income, American workers rely on Social Security for the bulk of their retirement income. Few Americans can save enough money to retire with a 401(k), especially considering that these programs aren’t well equipped to provide lifetime income.
It's time for the next generation of retirement programs. That's why we designed O3 PRIME, a solution where risks are shared appropriately, and with the flexibility and lifetime income options employees need. We have combined the best features of the DB and DC universes, including the guaranteed lifetime income of a DB plan with the lower risk profile, stable costs, and flexibility of a DC plan to create something new.
What are employees looking for in today’s competitive job market? A retirement plan that stands out from the crowd.
O3 PRIME is a sustainable solution that unlocks a better outcome for employers and employees. HR departments must bolster recruitment and retention efforts; prospective talent wants robust retirement plans. Therefore, we have crafted an innovative retirement program—O3 PRIME—based on the four pillars employees and employers look for in a retirement program: efficiency, engagement, improved workforce management and financial risk management.
Efficiency
Achieve better outcomes with minimal risk by combining the efficiencies of DB plans with the risk profile of a DC plan. Then, your employees enjoy high investment returns and a cost-effective and attractive lifetime income option.
Engagement
Ensure that employees thoroughly understand the program’s value. Keeping the plan fully transparent and allowing employees to customize the mix to fit their unique needs lets them know that the company values them, leading to loyalty and commitment.
Workforce Planning
Modernizing your retirement program is an excellent way to reduce turnover expenses and attract and retain employees. O3 PRIME allows you to provide additional incentives to drive the behavior you want. With many Americans stressed over saving enough money to retire, offering help is a great way to set your company apart as an “employer of choice”.
Financial Risk Management
A sustainable and affordable plan that allows you to manage more assets for a longer duration. The design creates predictable and consistent expenses year over year, making it an easy decision for a corporate finance department.
Relevant Content
Why DB plans are the right tool for the job
With a rapidly aging population and increasing average lifespan, Americans recognize that an effective retirement plan must provide a secure retirement income for the rest of the participant's life - whether one year or 30 years. As we're finding, DC plans are not suited to provide lifetime income. Fortunately, there is a simple enough response to these challenges – defined benefit (DB) programs, including cash balance plans, are excellent solutions to this need.
What incentivizes younger employees to stay at a job? Guaranteed lifetime income
Employee retention is the number one problem facing American companies right now. Not only is turnover frustrating for employers, but it is also expensive. Employers frequently underestimate the importance of excellent employee benefits, especially retirement, even for younger people. As more Americans have grown aware of the retirement crisis facing Baby Boomers and Gen X, the younger generations are preparing for the future.
Creating a new future with the best of both worlds
Only 11% of 126 million Americans working in the private sector participate in a defined benefit (DB) pension plan. In 1980, this number was 46%. The seismic shift from DB pension plans to defined contribution (DC) arrangements (i.e., 401(k) and 403(b)) plans is no secret. When DB plans became associated with high and volatile costs, employers shifted that risk onto individual employees via DC savings programs. However, those programs are only working for some Americans. By taking the best features of the DB and DC universes, we can create an innovative plan design that works better for everyone involved – workers and employers.
FAQ
What is the risk profile of an O3 PRIME design?
+O3 PRIME is funded through fixed employer contributions, similar in risk to those typically made to a 401(k) plan, but with a more equitable design that is less variable based on employee contributions. While the plan provides guaranteed lifetime income to retirees, this has always been the lowest-risk part of a DB plan. When designing O3 PRIME, we have worked with partners to create specialized investment strategies that further reduce the risk.
Does O3 PRIME offer a guaranteed lifetime income annuity?
+It offers guaranteed lifetime income from within the pension plan, more cost-effectively than an annuity that typically must be bought from an insurance company. In addition, because of its unique design, O3 PRIME allows the individual participant to increase or decrease their lifetime income at retirement to suit their unique circumstances.
How can O3 PRIME boost my company’s benefit communications?
+O3 PRIME is a game-changer. Most employees regard their employer 401(k) as generic table stakes – nothing more than an additional compensation for a generic 3rd party savings program. O3 Prime is different. It is a unique approach to retirement that is tailored to you as the employer and highlights for your employees that you are focused on them and care about their needs and future. It is a move away from transactional retirement savings to an integrated program tailored to you and your employees' needs, providing them with peace of mind and you with dedicated and loyal employees.
Is it implementing O3 PRIME a complex process?
+Being tailored to you and your employees means that O3 Prime requires more implementation efforts than typical 401(k) plans do. Fortunately, October Three has many years of experience and has developed specific technology and expertise to make the process quick and seamless, minimizing your time and risk and ensuring the final program is exactly how you want it.
How do you recommend administering O3 PRIME, and what challenges can be avoided?
+The three keys to streamlined administration are people, process and technology. October Three has all three: a team that is knowledgeable and dedicated to a white glove experience for you and your employees; years of experience administering hundreds of similar plans resulting in carefully structured and documented processes; and custom technology designed and built in-house to make your program work seamlessly.
Contact Idan Shlesinger
Idan is here to answer any questions you have around O3 PRIME and how your current retirement program can evolve to unlock the untapped potential.