A target date offering that helps participants navigate the challenges associated with generating retirement income was introduced today by J.P. Morgan Asset Management.
“This solution simplifies the saving and spending phases of retirement savings, leverages products familiar to plans and participants, and makes it easy to adjust your retirement income strategy as life’s priorities change.”
Steve Rubino, J.P. Morgan Asset Management
The new retirement income solution, SmartRetirement Lifetime Income, seeks to reduce portfolio volatility as participants near retirement and provide access to a stream of lifetime income payments offered by unaffiliated participating insurance companies by building upon a stable value structure.
“Retirement savers want a solution that turns complexity into clarity, allowing them to have the certainty of a source of income they cannot outlive, without giving up control of their savings,” said Steve Rubino, Head of Retirement for J.P. Morgan Asset Management. “We’re excited about SmartRetirement Lifetime Income’s innovative design, including the lifetime income feature supported by insurers. This solution simplifies the saving and spending phases of retirement savings, leverages products familiar to plans and participants, and makes it easy to adjust your retirement income strategy as life’s priorities change.”
SmartRetirement Lifetime Income allows plan participants to save for retirement using familiar target date funds and then transition to a personalized retirement income strategy, supported by multiple insurers selected by J.P. Morgan Asset Management, which are expected to include Equitable and Prudential. The new lifetime income feature will allow electing participants to draw down their stable value balance over an expected time horizon correlated with average life expectancies and then, upon meeting certain requirements, the participants will begin to receive annuity income directly from the supporting insurers.
“The combination of J.P. Morgan’s extensive investment capabilities with a solution offered by insurers that is designed to provide lifetime income will help more people achieve their retirement goals,” said Dan Oldroyd, Head of Target Date Strategies at J.P. Morgan Asset Management. “Retirement income solutions that utilize annuity products can feel complex and opaque to plan sponsors and participants. We believe our use of a target date offering complemented by annuity contracts results in greater transparency for our investors.”
Ann Nanda, Head of Future Growth Initiatives and Distribution Enablement at Prudential Retirement Strategies, notes that more and more plan sponsors are taking action to help employees protect their life’s work and ensure a secure retirement. “In-plan decumulation solutions like J.P. Morgan’s SmartRetirement Lifetime Income offer an innovative way to seize this opportunity for many Americans, so they can live a better life, longer,” Nanda said.
“Equitable believes access to secure lifetime income options through defined contribution plans is critical to helping close the U.S. retirement income gap,” said Aaron Sarfatti, Chief Strategy Officer and Head of Institutional Businesses and New Ventures at Equitable. “We look forward to supporting J.P. Morgan in its SmartRetirement Lifetime Income offering and helping its clients build a secure financial future.”
SmartRetirement Lifetime Income’s design is based on a deep understanding of how participants save and spend, and how much income they will need in retirement using data inputs such as J.P. Morgan’s proprietary participant savings data and Chase’s spending data across 66 million U.S. households. SmartRetirement Lifetime Income provides support from the savings phase through to retirement spending.
In the savings phase, participants simply select a target date vintage that aligns with their expected year of retirement. At retirement, participants will have the option to create a personalized retirement income plan allocating across a set of spending funds—the Lifetime Retirement Income Fund and the Flexible Retirement Income Fund.
SmartRetirement Lifetime Income was designed by the same team that oversees the firm’s SmartRetirement Target Date Funds, including experienced portfolio managers in the target date and retirement income fields, Daniel Oldroyd and Daniel Yem, who have a combined 45 years of industry experience.
To learn more about SmartRetirement Lifetime Income strategy, visit its dedicated website.
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