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Connecting Annuity and Pension Improves Retirement Outcomes

With premature withdrawals threatening retirement security, a $2 billion fund educated members on how their benefits work as a program ― connecting its annuity fund and pension plan to support lifetime income.

The challenge

For years, an East Coast multiemployer benefits fund watched participants take substantial annuity fund distributions — often as lump sums or rollovers into retail IRAs — just as those assets were meant to support long‑term retirement income. While the plan offered institutional pricing and fiduciary oversight, members frequently left those advantages behind.

The issue wasn’t the benefit design itself, but how well it was understood. Existing member communications focused heavily on how to access money, with far less emphasis on the advantages of keeping their accounts in the annuity fund, or how the annuity fund worked alongside the defined benefit pension fund to generate lifetime monthly income in retirement.

Trustees grew increasingly concerned that members were making decisions without fully grasping the tradeoffs: higher fees, less oversight and a greater risk of outliving their annuity fund savings as inflation reduced the buying power of their defined benefit pension plan benefit.

Without a new way to educate and engage members, this $2 billion fund risked seeing more retirement value walk out the door, one distribution at a time.

Our solution

The answer wasn’t restricting choice; it was changing the conversation.

The Segal team began by analyzing plan data to uncover member behaviors and distribution patterns, then evaluated how retirement benefits were being communicated across channels, including the website, call‑center interactions and member education events. That insight informed a strategic communications foundation that treated the pension and annuity as a single retirement program, clearly connecting how the two benefits work together to generate sustainable lifetime income.

To bring this strategy to life, we mapped a member career timeline with key inflection points and milestones, introducing financial education earlier and more consistently throughout a member’s working life. Communications were tailored to career stages, from new participants to those nearing retirement, and were strengthened through member voices, drawing on interviews with recently retired members to share trusted, real‑world experiences.

Equally important, the team equipped union representatives, business managers and call‑center staff with clear talking points and reference materials, ensuring that every member conversation reflected the same accurate, member‑focused message.

The results

The strategy worked. The shift in messaging wholly changed how the benefit was perceived and used.

Members now receive clearer, more relevant education at key moments that emphasize the value of long‑term retirement income over short‑term access. Communications provide ongoing retirement education and present the annuity as a complement to the pension, highlighting the advantages of remaining in an institutionally managed, fiduciary‑governed plan.

Trustees gained greater confidence that members are making more informed decisions, driven by consistent messaging across print, digital and in‑person channels.

Overall, the communications strengthened retirement readiness and helped members understand the importance of staying invested in their futures.

 

Concerned about early withdrawals from your retirement plan?

Segal’s retirement experts can help you educate members, connect benefits and support stronger long‑term outcomes.

Speak With Us

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.