J.P. Morgan Asset Management is launching a retirement income solution that will link directly with an AIG Life & Retirement annuity. SmartRetirement Plus will pair J.P. Morgan’s retirement investment funds and spending intelligence with AIG’s IncomEdge Control annuity.
The solution will provide options for participants to direct retirement savings from J.P. Morgan’s retirement investment funds to an AIG protected lifetime income product. It will also offer options to help participants determine when to begin receiving this income.
Participants will have the flexibility to make allocation decisions to account for their unique spending needs, all while maintaining access to their money. The new solution follows recent plan participant research from J.P. Morgan, which reveals that 85% of participants would likely leave their balances in their plans post-retirement if there was an option to help generate monthly retirement income. J.P. Morgan expects to expand the suite of annuities offered by third-party insurers through SmartRetirement Plus in the future.
SmartRetirement Plus will be delivered through a digital experience that provides participants with information on how to convert retirement plan savings into retirement income. The participant journey will emphasize convenience and access to insights on typical spending and savings behavior to drive informed decision-making and simplify the user experience.
Alongside these enhancements, the firm plans to modify its investment strategy across its JPMorgan SmartRetirement and SmartRetirement Blend target date funds, after each fund reaches its respective target retirement year to incorporate the methodology used by the JPMorgan SmartSpending Funds, thereby integrating the two series. The integrated series will use an asset allocation strategy designed with two main goals: promoting asset accumulation prior to the target retirement year (age 65), and supporting participants withdrawing a portion of their investment in the integrated funds each year over a 35-year period.
J.P. Morgan will produce an annual sample withdrawal amount, a hypothetical example designed to balance income needs in the current year against the need for income in the future. This feature for the integrated series is expected to be available in the first quarter of 2022. With nearly seven out of 10 participants concerned about outliving their money in retirement, participants may use the sample withdrawal amount as a consideration in determining how much of their investment to withdraw each year.
“J.P. Morgan Asset Management is committed to solving the retirement income challenges of everyday people,” said George Gatch, CEO, J.P. Morgan Asset Management. “With the decline in pension plan availability, the risk and responsibility of securing a sound retirement has been transferred from institutions to individuals, and we continue to evolve our SmartRetirement solutions to support participants through this transition.”