Making the case for Milliman Sustainable Income Plans (SIPs): The series

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By Grant Camp, Kelly S. Coffing, Ladd E. Preppernau | 16 October 2014

Making the case for Milliman Sustainable Income Plans (SIPs): Balanced retirement plan design needed
America is facing a retirement crisis as traditional retirement systems have failed to meet the needs of sponsors and participants in a balanced manner. This article discusses the consequences of imbalanced retirement systems and how Milliman Sustainable Income Plans™ (SIPs) provide an attractive alternative to traditional retirement plan designs.

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Making the case for Milliman Sustainable Income Plans (SIPs): Shared retirement risks: How SIPs stack up
This article discusses the risks faced by plan sponsors and participants. Traditional defined benefit (DB) plans require the plan sponsor to bear most of the risk while traditional defined contribution (DC) plans place all of the risk with the participants. Milliman Sustainable Income Plans™ (SIPs) balance retirement risks in a rational manner. By combining many of the strengths of both traditional plan designs, SIPs provide lifelong income to participants, like a DB plan, and have predictable employer costs, like a DC plan.

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Making the case for Milliman Sustainable Income Plans (SIPs): Strengths of a variable plan design
This article discusses the basics of Milliman Sustainable Income Plans™ (SIPs). Under a SIP, benefits adjust each year based on the investment return of the plan’s assets. Learn how the benefits adjust and how the adjustments keep the assets and liabilities in balance, resulting in stable funding requirements even in down markets.

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Making the case for Milliman Sustainable Income Plans (SIPs): SIPs stabilize benefits
Under a basic variable annuity plan (VAP) the benefits for participants can be volatile, even in retirement. This article discusses benefit stabilization options that offer solutions to this benefit volatility without sacrificing the design features of the basic VAP that make them attractive to both plan sponsors and participants.

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Making the case for Milliman Sustainable Income Plans™ (SIPs): Predictable contributions and accounting
This article discusses the technical details of how Milliman Sustainable Income Plans™ (SIPs) are valued. Due to the way in which benefits adjust each year, plan liabilities are not sensitive to changes in the interest rate environment. Combined with the elimination of investment risk, this results in predictable contributions and accounting.

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Making the case for Milliman Sustainable Income Plans (SIPs): Transition to a SIP design
This article discusses options that plan sponsors have for transitioning from their current retirement plan to a Milliman Sustainable Income Plan™ (SIP). Regardless of an employer’s current retirement program, SIPs offer a balanced approach to retirement risk that should be seriously considered by employers who want to provide meaningful lifelong retirement income to their employees.

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Acknowledgments

The authors thank the following Milliman colleagues for their assistance in producing these articles: Claire Armstrong-Hann, Erin Breyman, Robert Busey, Charles Clark, Mary Der, Jeremy Engdahl-Johnson, Jessica Gardner, Craig Glyde, Joshua Goodwin, Ryan Hart, Steven Hastings, Bret Linton, William Most, Mark Olleman, Lewis Smith, and Heidi tenBroek.

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