Tag Archives: Janet McCune

Milliman wins prestigious 2018 Gold Quill Award

Milliman today announced that it has received the 2018 Gold Quill Award of Excellence in Human Resources & Benefits Communication at the International Association of Business Communicators (IABC) Excellence Gala in Montreal.

Milliman received the award for the campaign “A Fine Blend,” which it developed for client Southern Glazer’s Wine and Spirits. Milliman used a six-month multimedia campaign to introduce a new culture, harmonized benefits program, and online enrollment process to Southern Glazer’s 22,000 employees.

Of the entry, judges said, “We really like how Milliman’s campaign supported the client’s business outcome and has been measured in terms of a number. A number that makes the board of directors sit up and take notice of communication. Likewise, this very well executed campaign has met and exceeded the tactical objectives and targets. Very well done.”

We are honored to have been recognized internationally for outstanding achievement in communication and change management. But more importantly, we are thrilled to have supported the Southern Glazer’s human resources (HR) team in achieving their business, HR, and benefits objectives.

Milliman’s Julie Cannaday with client Southern Glazer’s Wine & Spirits HR leaders Michelle Toney, Margaret Walker and Nicole Boyd (from left) accept the 2018 Gold Quill Award of Excellence in Human Resources & Benefits Communication at the International Association of Business Communicators (IABC) Excellence Gala in Montreal.

For more than 40 years, IABC’s Gold Quill Awards have recognized excellence in strategic communication worldwide and are acknowledged as one of the most prestigious awards programs in the industry.

“Only exceptional work earns an IABC Gold Quill Award,” said Cindy Schmieg, ABC, IABC fellow, and chair of the awards committee. “Each entry is rigorously reviewed by multiple experienced communicators from around the world who are trained in applying IABC’s Global Standard of the Communication Profession. The award winners represent our profession of ethical practitioners contributing to organizational outcomes.”

Milliman’s HR Communication Practice wins 2016 Graphis, 2015 Marcom, and 2015 HOW In-House Design Awards

Milliman today announced that it was recently honored with the following international communication awards:

• “The Key Ingredient” Red Robin Non-Saver Campaign: 2015 Marcom Platinum Award, Graphis 2016 Merit Award, 2015 HOW In-House Design Merit Award
• “The Importance of Diversification – PlanAhead for Retirement”: 2015 Marcom Gold Award
• “Get A Tax Break” motion graphic video: 2015 Marcom Award
• “Happy Holidays” e-card: Graphis 2016 Merit Award, 2015 Marcom Award

The winning materials were created by the Dallas-based team of senior communication consultants, writers, graphic designers, and web experts. Milliman delivers award-winning communication services to millions of employees across the United States. Services range from videos, interactive modelers, and websites to meeting services, print, and mobile.

Our clients hire us to make their messages clear to their employees, to cut through the clutter, to change attitudes, and to drive behavior change. Individual client results and statistics confirm the success of our ongoing work, but these awards are especially meaningful because they validate the level of excellence we bring to our clients from an international perspective.

For more information about Graphis, Marcom, and HOW awards, visit: http://marcomawards.com, http://www.howdesign.com/design-competitions/inhouse-design-awards, and http://www.graphis.com/awards.

How to avoid running out of money in retirement: Final in a series

McCune-JanetEarlier, we described three things 401(k) plan sponsors can do to help participants avoid running out of money in retirement. Offering managed risk equity funds as investment options, and incorporating them into the asset allocation glide path for the plan’s auto-investing tools, addresses two of three fundamental risks for retirement income: market risk and inflation risk. By continuing to service retirees as ongoing participants in the plan, the plan sponsor helps retirees maintain continuity between their pre-retirement and post-retirement investment strategies with lower, institutional investment expenses. But we haven’t addressed the issue of longevity risk—how can participants know how long their retirement savings have to last?

One powerful solution is to use a deferred annuity contract, which transfers longevity risk to an insurance company by starting payouts to the policyholder at an advanced age. On July 1, 2014, final Treasury regulations were issued regarding “qualified longevity annuity contracts” (QLACs) held within qualified defined contribution plans, i.e., 401(k) plans, 403(b) plans, IRAs. The regulations provide an exception to the required minimum distribution (RMD) rules of Internal Revenue Code section 401(a)(9), which require certain distributions to be made from qualified plans starting at age 70½. Without this exception, a deferred income annuity could cause the plan to violate the RMD rules, because the annuity does not begin payments until much later (usually age 80 but at least 85). The regulations state that a QLAC is not subject to RMDs until payments begin under the terms of the annuity, thus expanding retirement income options as an increasing number of Americans reach retirement age.

A QLAC can be purchased with up to 25% (maximum $125,000) of the account balance. If a participant at age 65 were to use 18% to 20% of their portfolio to purchase a QLAC that commences benefit payments at age 80, the remaining 401(k) account need only provide retirement income for 15 years, when the annuity payments would begin. Removing the uncertainty around how long the 401(k) account needs to last allows for a significant increase in retirement income. By adding a QLAC and applying the investment strategies suggested earlier in this series, we have achieved significant improvement in the sustainable withdrawal rate for the participant, while maintaining an equal probability of success!

In order to maintain simplicity and portability of the 401(k) plan, as well as to minimize fiduciary exposure for the plan sponsor, the best practice may be to encourage participants to hold the QLAC within an IRA. The participant may initiate a rollover distribution from the 401(k) to an IRA in order to pay the premium. The retiree takes installment payments from the 401(k) from age 65 to 80, then the annuity benefits provide retirement income from age 80 until death.1

This is Step 4 in helping 401(k) participants create sustainable retirement income from their 401(k) accounts (see the first three steps here). Undoubtedly, creative strategies will continue to emerge as the industry tackles this issue.


1This statement is not a recommendation to buy investment or insurance products. An individual should consult their personal adviser to determine the suitability of any investment or insurance product.

How to avoid running out of money in retirement: Third of a series

McCune-JanetA 401(k) plan sponsor or a financial advisor who has been following our blog series, understands these best practices: 1) offering managed risk equities within the investment fund options, and 2) providing a lifelong asset allocation tool with explicit, age-appropriate risk management. In addition, the plan sponsor as fiduciary must monitor fund performance and expenses on behalf of the participants. With all of this in place, why would you encourage retirees to exit the 401(k) plan right when they need these services the most? Isn’t the point of all of this to provide a sustainable income stream for participants embarking on their retirement journey?

As a third best practice, we would suggest that plan sponsors include an installment payment provision in their plan documents that allows retirees to use their account balance as a source of retirement income. Generally, participants are encouraged to roll their account balances into retail IRAs, or perhaps to purchase some form of annuity to guarantee a minimum income level needed to support their living expenses. However, the employer sponsored retirement plan offers significant benefits some other options cannot. First, it provides a seamless approach for their preretirement and postretirement investment strategy. The retiree continues to access a familiar website and call center and there are no new, complex insurance contracts to understand or purchase. The retiree retains flexibility and the control of his or her own assets, and does so with institutional investment expenses, which are generally lower. Finally, the entire account balance passes to the designated beneficiary upon the death of the retiree.

This solution offers benefits to the plan sponsor as well. Additional assets remaining in the plan provide economies of scale for investment and administration costs, and any additional costs may be borne by the retiree accounts. And, in a way, this feature facilitates an experience similar to defined benefit (DB) retirees, which may be especially meaningful when a plan sponsor freezes and/or terminates a pension plan in favor of an enhanced 401(k) or defined contribution (DC) program.

We cannot forget about the 401(k) providers, like the recordkeeper and the investment advisor. Servicing retirees through the plan can be a win for them as well, since the relationship with the participants continues, as do the economies of scale that keep plan expenses down. This opens the opportunity to expand the services specifically aimed at retirees, such as:

• Targeted education and communications focused on retiree needs
• Direct interaction with retirees for change of name, address, benefit amount, and status
• Expanded website tools and call center services to provide broader services
• Assistance with projections of sustainable withdrawal rates and probability of success
• Final account settlement services upon the passing of the retiree

Offering an installment payment provision in the 401(k) plan and continuing to fully service the retirees through the plan offers a win-win-win solution for participants, plan sponsors, and providers. That is Step 3 for a winning retirement solution.

How to avoid running out of money in retirement: Second of a series

McCune-JanetOur first blog focused on the need to address the fundamental risks to sustainable income during retirement: market risk, inflation risk, and longevity risk. We identified “managed risk equities,” such as those offered by Milliman Financial Risk Management, LLC, as an important tool for managing those risks.

Plan sponsors seeking to provide a retirement income solution in their 401(k) plans are well advised to include managed risk equity funds in the 401(k) investment fund lineup. Because participants may need help with the investment decisions in their personal accounts, it’s wise to take it a step further and incorporate these funds into the plan’s automatic investing features. For example, Milliman offers a portfolio service called InvestMap that creates an asset allocation glide path for each participant, based on each one’s current age. Using the underlying core funds offered in the 401(k) plan, InvestMap adjusts the allocation each year on the participant’s birthday, and automatically rebalances to that allocation each quarter. Rather than selecting a “model,” participants elect to be enrolled in InvestMap, and their entire account balances are then invested according to the glide path. InvestMap is easy to understand, it meets the Qualified Default Investment Alternative (QDIA) requirements, and is easily integrated into the plan’s investment policy statement. In addition, it takes advantage of the best-in-class managers and funds selected by the plan sponsor and the advisor, particularly with regard to monitoring performance and transparency of fees. InvestMap is an ideal vehicle for delivering explicitly integrated, age-appropriate risk management for the individual participant.

Other recordkeepers and advisors offer similar solutions, and some provide custom model portfolios or proprietary collective funds, most of which include appropriate asset allocations for young investors, investors nearing retirement, and everyone in between. Any of these “do it for me” tools can be helpful in delivering professional help to participants. What is important is that the glide path continues to adjust for the participant, even in retirement, and includes larger allocations to managed risk equities, rather than to cash or bonds, as the time horizon shrinks. As discussed earlier, this may reduce the volatility and improve the risk-adjusted return of the portfolio. The desired outcome is an increase in sustainable retirement income.

For many years, recordkeepers and advisors have tried to educate participants into becoming good investors – with varying levels of success. A better approach would be to create good investors by providing the right tools. An automatic investment alternative, which provides a lifelong asset allocation strategy and incorporates managed risk equities at increasing amounts over time, may be the most effective way for participants to be good investors and become successful retirees in a 401(k) plan. That is Step 2.

How to avoid running out of money in retirement: First of a series

McCune-JanetThe Schwab IMPACT 2014 conference, held this month in Denver, Colorado, was attended by independent financial advisors from around the country. Much discussion centered on how to help clients achieve financial security during their retirement years. So how can potential retirees protect themselves from the volatile markets that can quickly erode a lifetime of savings? Milliman presented some new ideas for achieving sustainable retirement income for 401(k) participants, and with applications far beyond.

First, a strategy should address the risks. We believe the key to success centers around the effective management of three fundamental risks: market risk, inflation risk, and longevity risk. Downturns in the market can erode a portfolio, and the timing of those downturns can make a significant difference. Market declines early in retirement can combine with portfolio withdrawals in a toxic way, because money withdrawn is not available to rebound when the market recovers. Conventional wisdom tries to alleviate the volatility by diversifying into bonds, but bonds generally have limited inflation protection, and the portfolio can experience a loss of purchasing power over time. Retirees must withdraw less during the early years of their retirement in order to “pre-fund” the damaging effects of inflation in the future.

Milliman Financial Risk Management, LLC offers a financial risk management strategy that seeks to reduce downside equity exposure during volatile bear markets, while minimizing drag during stable rising markets. The compelling track record of this pioneering technique for some of the world’s largest financial institutions has set the stage for application to personal retirement accounts. Available in the form of mutual funds, collective funds, and separate accounts, this simple, transparent futures-based risk management approach provides volatility management with a capital protection strategy. Any of these products are suitable fund selections for a company’s 401(k) plan.

Generally, managed-risk equities are a more effective tool to control market and inflation risk relative to bonds. We are not suggesting moving completely out of bonds or shifting all assets into managed-risk equities, but rather an incremental change that develops over time. For example, diverting 50% to 75% of the equity allocation into a managed-risk strategy, instead of increasing the bond allocation as the time horizon shrinks, can significantly improve the Sharpe ratio (the amount of return per unit of risk) for a retiree’s account. The result is an increase in the amount of retirement income that can reliably be withdrawn from the account over the life of the participant.

Including managed-risk equities as fund selection in a company’s 401(k) plan delivers professional risk management techniques previously available only to large financial institutions to the individual 401(k) plan participant. This is Step 1.