LifeStage Retirement Income—New Service for Managing Distributions

In your role as plan sponsor, you may assist participants with their participation in the United Methodist Personal Investment Plan (UMPIP). However, most participants are on their own deciding on a distribution strategy. They need to determine a course of action that won’t cause them to run out of money during their lifetime or live too frugally to enjoy their retirement.

It can be difficult to decide how much to periodically withdraw from retirement plan accounts, when to adjust those payments and by how much. But the General Board has introduced a new service designed to make distribution planning easy: LifeStage Retirement Income. This new service automates retirement distributions by turning General Board-administered defined contribution accounts, such as UMPIP, into monthly income that is designed to last for a lifetime. And the service is available at no cost to participants.

The LifeStage Advantage
Participants must have an account balance that would support monthly payments of at least $100, and must be enrolled in the LifeStage Investment Management Service to use LifeStage Retirement Income. Using both services provides regular monthly income with cost-of-living adjustments.

While the likelihood of running out of money is small, LifeStage Retirement Income is not an annuity and, therefore, cannot guarantee lifetime income. However, LifeStage Retirement Income does provide:

• Flexibility—participants can stop the service or take additional withdrawals from UMPIP at any time.
• Investing—participant accounts continue to be invested on their behalf among five of the General Board investment funds with automatic adjustments to fund allocations, as warranted.
• Availability—any remaining account balance belongs to participants’ beneficiaries upon their death.
• Planning tools—a reserve account allows participants to set aside up to 20 percent of the account balance as a reserve for emergencies or for an anticipated significant expense; the LifeStage Retirement Income Calculator can show participants how much their payments would be through the service, or they can use the calculator to help determine an appropriate payment amount if they plan to manage their own distributions.

Learn More
Additional information about LifeStage Retirement Income is available here. If a participant is retiring and would like to enroll in LifeStage Retirement Income, they can sign up through Benefits Access (www.benefitsaccess.org)—go to “Take Action” and under MANAGE DISTRIBUTIONS select “Sign up for LifeStage Retirement Income.” If they have questions, they can call the General Board at 1-800-851-2201. Representatives are available Monday through Friday from 8:00 a.m. to 6:00 p.m., Central time.

LifeStage Services and Ernst & Young Assist Participants in Making Key Decisions

The value-added services available through the General Board have been strengthened with the addition of LifeStage Retirement Income. While each service provides guidance to participants, using them together increases their effectiveness and provides an opportunity for participants to customize their retirement savings, investment and distribution planning. Here’s how it works.

• During a participant’s working years, they can invest their retirement savings through LifeStage Investment Management Service. The service develops a customized target investment mix (also called a “target fund allocation”) based on key information--including age, risk tolerance and access to Social Security benefits--adjusts that target over time and periodically rebalances the participant’s investment portfolio as necessary to maintain the target investment mix.
• When participants move from saving to spending in retirement, LifeStage Retirement Income manages distributions from their UMPIP account.
• If a participant is undecided about whether to use either LifeStage service to create their own investment mix or distribution plan, or if they have other financial questions, Ernst & Young Financial Planning Services can provide guidance. Financial planners are available Monday through Friday from 8:00 a.m. to 7:00 p.m., Central time at 1-800-360-2539.

We need your help to increase awareness of these valuable services. An overview of LifeStage Retirement Income is included in this issue, and subsequent issues will feature the LifeStage Investment Management Service, and Ernst & Young Financial Planning Services. If you have questions about these or other General Board offerings, contact the General Board at 1-800-851-2201.

2013 IRS Limits for UMPIP Savings

The IRS limits the amount of money that can be set aside annually in retirement savings accounts. For 2013, the contribution limits for retirement savings accounts increased to:

• $17,500 in before-tax contributions (from $17,000 in 2012), or
• $23,000 for participants age 50 or older.

Total annual before-tax and after-tax participant and plan sponsor contributions combined may not exceed the participant’s compensation or $51,000 (whichever is less) for 2013. Additional details are available here.

Contribution Changes
Participants may change their UMPIP contribution amount or percentage as of the beginning of any month by submitting a new Before-Tax and After-Tax Contributions Agreement. Please be sure to update your participant elections in Benefits Access or forward completed participant forms to the General Board, so that our records are accurate.

Please also be sure to submit contributions to the General Board on a timely basis. Late submissions can significantly impact a participant’s account balance over time. They also potentially expose your organization to extra charges, since government regulations require that missing investment gains must be covered by the employer.

Partnering with You

Our goal is to strengthen our partnership with you through this newsletter. Is there something you would like to read about? What questions do you have? Let us know what you think about this publication. Your suggestions will help us provide content that is tailored to your needs. If you have feedback you’d like to share, click this feedback link.

Are you moving on to a new role and interested in sharing this newsletter with your replacement? Are there other individuals at your organization who you would like to receive this newsletter? Visit www.gbophb.org/psn to sign up others who should receive this publication.

If you missed the February 2013 issue, access it here.

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