Pacific Life and Franklin Templeton announced a strategic agreement to expand access on guaranteed lifetime income streams as an employee benefit.
The two firms will bring together Pacific Life’s Income Horizon and Franklin Templeton’s Goals Optimization Engine (GOE) to form a personalized income approach structured within collective investment trusts (CITs) to ease implementation.
The lifetime income framework will allow defined contribution (DC) plan participants to seamlessly convert a portion of their accumulated retirement savings into a guaranteed income stream for life inside of their existing plan, Pacific Life explained in a release. The solution combines personalized asset allocation advice provided by Franklin Templeton that includes allocations to lifetime income secured by Pacific Life to extend into a complete decumulation strategy.
“This partnership underscores a shared commitment to retirement income security, with a focus on innovation and customization to meet the evolving needs of plan sponsors and their participants,” said Brian Woolfolk, executive vice president and head of institutional business at Pacific Life. “Our collaborative approach addresses a number of key concerns that participants have expressed in research studies.”
Pacific Life notes that plan participants nearing retirement have a “widely divergent set of relevant characteristics,” including different tenures, balances, savings rates, continued usage of target-date funds (TDFs), access to traditional pension plans, marital status, desired retirement ages and preferences regarding spending in retirement.
Offering a guaranteed income solution within a DC plan could have its perks too, including competitive group/scale pricing, fiduciary oversight, professional management, dollar-cost averaging, and portability. For plan sponsors, this solution may help address scaled costs and ease of implementation.
“We believe every U.S. worker and household has the right to experience financial well-being throughout each phase of life,” said Yaqub Ahmed, co-head of retirement, insurance, and 529 distribution at Franklin Templeton. “Our continued investment in strategic partnerships and product development is meant to ensure we are bringing a breadth of solutions to market to meet the various needs and preferences of plan sponsors and their participants. We are committed to creating transformative changes, through new solutions such as this one with Pacific Life, and early indications are there is a lot of interest on behalf of plan sponsors for what we are bringing to market.”
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.
