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Lincoln National (LNC) Chosen to Offer Enhanced Retirement Plans

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Zacks Equity Research
·4 min read
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Lincoln National Corporation LNC recently unveiled that its Retirement Plan Services (RPS) business has been chosen by First Merchants Bank. Shares of Lincoln National have gained 0.9% in the last two days’ trading.

The move has enabled Lincoln National to act as the retirement plan provider for First Merchants Bank. Notably, First Merchants Bank has its areas of operations across Indiana and the Midwest region. It has been effectively catering to needs of 2,200 participants through its retirement plans, which accounts for around $170 million in retirement savings.

There are several reasons, which can be attributed to the selection of Lincoln National by First Merchants Bank. Firstly, both the companies have their operations in the same state, which will aid in enhanced understanding of the retirement plan needs of participants.

Secondly, Lincoln’s proven business model has benefited several plan sponsors and participants in the past by providing improved retirement outcomes. The model assures personalized assistance and enhanced retirement solutions for employees at First Merchants Bank, who will have access to Lincoln’s WellnessPATH solution courtesy of the alliance. This solution helps employees prioritize their financial needs thereby paving the way for increased retirement savings and a secure future.

It is worth mentioning that the latest move bodes well since the COVID-19 pandemic-induced volatilities have given rise to financial insecurities across the United States.  Case in point, 91% of full-time employed U.S. adults are worried about one or the other facet of financial wellness, reflecting the dire need for enhanced retirement solutions further.

Thirdly, participants at First Merchants Bank will be able to work closely with retirement consultants at Lincoln National, which can help participants in amplifying their retirement savings.  Also, the retirement income estimator will help the same participants in getting a clear view of their potential retirement income in real terms.

Shares of this Zacks Rank #4 (Sell) life insurer have lost 13.2% in a year compared with the industry’s decline of 3.5%.

Constant Efforts to Boost Retirement Business

Lincoln National has undertaken consistent efforts to bolster its RPS business. It has been committed to providing a comprehensive financial planning for the retirees.

Notably, Lincoln National utilizes its retirement, insurance and wealth protection expertise to serve financial goals of more than 17 million customers, which further reinforces the credibility of the company. It has launched several retirement solutions this year, ranging from next generation of Lincoln AssetEdge Variable Universal Life (VUL) to a Multi-Manager solution in order to assist investment and retirement decisions of small business owners.

These initiatives have played a crucial role in establishing trust on Lincoln National for serving retirement plan participants. Evidently, the metrics for measuring the efficient performance of the RPS segment witnessed improvements in the third quarter. Operating income in the segment rose 14% year over year to $50 million owing to favorable returns within its alternative investment portfolio and sound expense management strategies. Revenues of $311 million improved 4.4% year over year.

Thereby, the continued trend of Lincoln National effectively catering to the retirement plan participants through its enhanced solutions is likely to provide an additional impetus to its RPS business in the days ahead.

Stocks to Consider

Some better-ranked stocks in the insurance space include Sun Life Financial Inc. SLF, Primerica, Inc. PRI and Arch Capital Group Ltd. ACGL. While Sun Life sports a Zacks Rank #1 (Strong Buy), Primerica and Arch Capital carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sun Life, Primerica and Arch Capital have a trailing four-quarter earnings surprise of 14.78%, 10.04% and 31.76%, on average, respectively.

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Lincoln National Corporation (LNC) : Free Stock Analysis Report
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