In a move set to expand conversations surrounding guaranteed lifetime annuities, Empower announced today its latest partnerships with several asset management and insurance providers to offer a range of in-plan and out-of-plan guaranteed income solutions to its defined contribution (DC) plans.
According to Empower, the new offerings are expected to launch in the coming weeks and will include partnerships with:
- Managed accounts with a guaranteed lifetime withdrawal benefit featuring Income America by American Century Investments
- A new target date fund series featuring American Funds and TIAA’s Secure Income Account with flexPath managing the glide path allocations and the collective investment fund provided by Great GrayTrust Company, LLC
- A managed spend-down strategy and proprietary variable annuity featuring SmartWithdrawal and Empower SecureFoundation II
- Access to an annuity marketplace that offers out-of-plan annuity offerings through Blueprint Income
In a statement, Empower says it hopes that by offering multiple options with service providers, employers, and advisors, it will reach an array of plan participants wanting to create guaranteed income streams in retirement.
“The purpose of any individual’s retirement plan is to create an income stream they can rely on when their working years are behind them,” said Empower President and Chief Operating Officer Rich Linton. “The great opportunity in this new set of offerings from Empower is that it brings together the expertise of so many firms to deliver the promise of retirement income to the 18 million Americans we serve today.”
The collaborations come as more plan sponsor clients and participants express interest in lifetime guaranteed income solutions. A 2023 survey conducted by Morning Consult for the American Council of Life Insurers (ACLI) found that 54% of retirement savers are considering lifetime income products to support them during volatile economic environments.
Separate research from Empower shows that 60% of plan sponsors want to help participants convert plan account balances into income.
Other findings note that plan advisors and consultants seek services that support retirement income needs in defined contribution plans, especially as participants worry about income guarantees in their later years. The firm’s latest Empowering America’s Financial Journey study reports that 61% of participants believe Social Security will be unavailable to them or will at least be limited in providing retirement income. As a result, six in 10 Americans are confident their savings and investments will last until age 90.
Matthew Wolniewicz, president of Income America and one of Empower’s collaborators, hopes the new partnerships will broaden access for participants seeking protected income in retirement, especially for near-retirees.
“It’s time for the financial services industry to complete the circle,” he said in a statement to 401(k) Specialist. “We started it with automatic enrollment, then we went to automatic escalation, then we went to professionally managed solutions whether it be target-dates or managed accounts, but we kind of left the participant at the doorstep when they were going to retire. It’s like we took them to the finish line, left them there and didn’t help them cross it.”
Wolniewicz believes guaranteed income solutions will one day turn into a standard workplace benefit, like how automatic solutions eventually became the norm in retirement features. The newest partnerships with Empower will only add to this progression.
“It’s an evolution, and this is only the beginning,” he stated.
SEE ALSO:
- Empower Preps New Digital Tool for Small Employer 401(k) Setup
- Empower Doubles Customer Base and AUM Since 2020
- Nationwide Adds Income America ‘5ForLife’ for Managed Account Participants
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
