Looking for a SECURE Act success story? Consider news today from global investment and research firm AllianceBernstein L.P., which cites the landmark 2019 retirement legislation providing a safe harbor for annuities as an important factor in the growth of its business.
New York-based AllianceBernstein (AB) announced today that its Lifetime Income Strategy (LIS) retirement solution has surpassed $5 billion in total assets under management, a major milestone that more than doubles the asset total from a year ago ($2.1 billion as of March 31, 2020; $5.7 billion as of March 31, 2021).
To help defined contribution (DC) plan participants plan for retirement, AB designed LIS to be an effective accumulation strategy in the working years and a reliable distribution strategy in retirement by combining a personalized portfolio similar to a target-date fund with a flexible guaranteed income program.
LIS has been available to the DC market since 2012, making it what AB calls a “time-tested, in-plan, guaranteed income solution backed by multiple insurers,” including Nationwide Financial, Prudential Retirement, Lincoln Financial Group and Equitable, with more insurers actively being added.
“At AB, we’re committed to delivering investment solutions that provide financial security in retirement, and the growth of our Lifetime Income Strategy reflects how we’re partnering with plan sponsors and participants to do that,” said Seth Bernstein, CEO and President of AB. “Many plan sponsors are realizing that adding a lifetime income option can benefit both their participants and their organizations. It can reduce employees’ financial stress and provide certainty around retirement. It can also help an organization manage its workforce by attracting and retaining talent.”
Last year, AB implemented LIS in multiple retirement plans, including the State Universities Retirement System (Illinois) plans, working closely with the plans’ recordkeeper, Voya Financial, and the consultant, CAPTRUST (formerly Cammack Retirement Group). AB cites legislative progress as a catalyst and a commitment to investing in the business as a foundation for recent—and future—success.
“Legislative action in Washington has helped drive enhancements for DC plans. The SECURE Act of 2019 offers a safe harbor for annuities, an important factor in the growth of our business. We’re seeing more plan sponsors taking steps to include retirement income solutions, which can provide participants with guaranteed income in retirement,” said Jennifer DeLong, head of defined contribution at AB. “We continue to add resources, creating leverage to support more plan sponsors and work with additional partners to deliver effective lifetime income solutions.”
For nearly a decade, AB has been implementing LIS as a Qualified Default Investment Alternative (QDIA) for clients across diverse industries. The firm was an early innovator, designing and launching LIS with United Technologies Corporation (now Raytheon Technologies), and offers LIS in its own 401k plan.
AB said it continues to expand reach and enhance LIS, incorporating more customization and flexibility, stating that “individual participants have unique circumstances, so an effective retirement income solution shouldn’t be one-size-fits-all.”
SEE ALSO:
- In SECURE Act’s Wake, Nationwide to Launch Full Suite of In-Plan Annuities
- Sponsor Considerations for Retirement Income Solutions
- Why It’s A New Day for Annuities in 401ks
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
