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Navigating Retirement: Annuities vs. IRA Withdrawals for Intercontinental Exchange Employees

There are just a couple of things almost all Intercontinental Exchange retirees need when they hit retirement: predictable income and protection against a cluster of risks, which include longevity risk, performance risk and sequence-of-returns risk.

In the past we have seen retiring Intercontinental Exchange employees utilize the “4% rule,” where retirees take annual withdrawals start at 4% of the entire portfolio and increase with inflation. They then keep the remainder of the portfolio with at least 50% invested in equities. Based on historical data, this would give a Intercontinental Exchange retiree about 30 years of retirement income.

As the economy constantly changes, a number of factors may force prospective Intercontinental Exchange retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.

As life expectancies increase, Intercontinental Exchange retirees need to prepare for expenses over a longer time frame. In the past we would plan for a 15 to 20 year retirement, but now we need to prepare for a 30 to 35 year retirement. What is available to assist meeting the 35-year time frame?

The annuity strategy can assist with a few of the pitfalls we see in the 4% rule. For example:

If you need $50,000 per year in retirement and need that for 30 years, you may need $1.2 million in fixed income at a 3% interest rate. BUT if you look to fund $50,000 for 30 years, you can cover that expense with $800,000 by choosing the annuity option.

The other pitfall with the 4% rule is that it may not reflect a client’s risk tolerance. When you are accumulating assets, you can afford more volatility and can take on more risk than when in the retirement and withdrawal phase after leaving Intercontinental Exchange.

Also, should we see a drop in the market, you would be able to reduce your income using the 4% rule, which you cannot do if you choose an annuity option.

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What type of retirement plan does Intercontinental Exchange offer to its employees?

Intercontinental Exchange offers a 401(k) retirement savings plan to its employees.

How can employees of Intercontinental Exchange enroll in the 401(k) plan?

Employees of Intercontinental Exchange can enroll in the 401(k) plan through the company’s benefits portal during the enrollment period.

Does Intercontinental Exchange match employee contributions to the 401(k) plan?

Yes, Intercontinental Exchange provides a matching contribution to employee contributions in the 401(k) plan, subject to certain limits.

What is the maximum employee contribution limit for the 401(k) plan at Intercontinental Exchange?

The maximum employee contribution limit for the 401(k) plan at Intercontinental Exchange follows the IRS guidelines, which may change annually.

When can employees of Intercontinental Exchange start contributing to their 401(k) plan?

Employees of Intercontinental Exchange can start contributing to their 401(k) plan as soon as they meet the eligibility requirements set by the company.

What investment options are available in the Intercontinental Exchange 401(k) plan?

The Intercontinental Exchange 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

Can employees of Intercontinental Exchange take loans against their 401(k) savings?

Yes, employees of Intercontinental Exchange may be able to take loans against their 401(k) savings, subject to the plan’s terms and conditions.

What happens to my 401(k) plan if I leave Intercontinental Exchange?

If you leave Intercontinental Exchange, you have several options for your 401(k) plan, including rolling it over to another retirement account, cashing it out, or leaving it in the Intercontinental Exchange plan if permitted.

Is there a vesting schedule for the 401(k) contributions at Intercontinental Exchange?

Yes, Intercontinental Exchange has a vesting schedule for employer contributions to the 401(k) plan, which means that employees must work for the company for a certain period to fully own those contributions.

How often can employees change their 401(k) contribution amounts at Intercontinental Exchange?

Employees of Intercontinental Exchange can change their 401(k) contribution amounts during designated enrollment periods or as allowed by the plan.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Plan Name: Intercontinental Exchange Pension Plan (specific plan name may vary in documents) Years of Service and Age Qualification: Typically, eligibility for pension plans includes a minimum number of years of service and reaching a certain age. For ICE, you would generally need to have a specific number of years of service (e.g., 5-10 years) and be a certain age (e.g., 55 or older). Pension Formula: Pension benefits are usually calculated based on years of service and salary, often using a formula like “Final Average Salary x Years of Service x Pension Multiplier”. Specific formulas should be detailed in the plan documents. Plan Name: Intercontinental Exchange 401(k) Plan Eligibility: Typically, employees are eligible to participate in the 401(k) plan from their date of hire or after a specific waiting period. Plan Details: The 401(k) plan often includes options for employee contributions, company matching contributions, and investment choices. The specifics of matching contributions, vesting schedules, and investment options are detailed in the plan document.

Restructuring and Layoffs: In early 2023, ICE announced a restructuring plan involving a reduction in workforce. The decision was influenced by strategic shifts to streamline operations and adapt to market changes. The economic uncertainty and ongoing technological advancements necessitated this move to maintain competitive advantage. This restructuring highlights the need for employees and stakeholders to stay informed about such changes given the broader economic and political context affecting investment strategies.

Stock Options: In 2022, Intercontinental Exchange (ICE) provided stock options primarily to senior executives and key employees as part of their incentive compensation program. These options generally had a vesting period of 4 years and were priced at the market value at the time of grant. RSUs: Intercontinental Exchange (ICE) awarded RSUs to a broader range of employees including managers and above. The RSUs typically vested over a 3-year period, with performance-based metrics affecting final vesting

Health Benefits: ICE provides a comprehensive benefits package, including medical, dental, and vision coverage. The plans are designed to be flexible to cater to various employee needs. Acronyms and Terms: HDHP: High Deductible Health Plan HSA: Health Savings Account FSA: Flexible Spending Account EAP: Employee Assistance Program Recent News: ICE's benefits information is generally updated annually, with the latest changes reflecting adjustments to premiums, co-pays, and coverage options.