The latest in-plan guaranteed lifetime income solution to hit the market was unveiled Oct. 15 by T. Rowe Price in cooperation with Pacific Life.
“By pairing MLI’s robust approach to asset management with the security of a QLAC, we are creating a simple yet dynamic approach to helping participants retire more confidently.”
Pacific Life’s Michael Oler
Managed Lifetime Income (MLI) is the name of the new retirement solution designed to provide retirees in a defined contribution plan with stable and predictable monthly income for life. MLI combines a managed payout investment from T. Rowe Price with a Qualifying Longevity Annuity Contract (QLAC) from insurance and annuity provider Pacific Life to offer a unique union of professional asset management and guaranteed monthly payouts.
“T. Rowe Price recognizes the diverse retirement income needs of plan participants and is committed to offering a wide range of solutions to empower them with choice and flexibility,” said Francisco Negrón, head of Retirement Plan Services at T. Rowe Price. “We understand that a common concern among retirees is whether they will have sufficient income for their remaining years. The introduction of MLI underscores our dedication to ensuring retirees can feel financially secure about their future.”
T. Rowe Price has a strong background in managed payout products with the introduction of Retirement Income 2020 in 2017, followed by Retirement Income 2025. MLI is rooted in the research, insights, and methodology that underpin the firm’s target date solutions, and expands on the managed payout investment portion by adding a guaranteed component. Together, these retirement income solutions give T. Rowe Price clients the ability to choose the product that best fits their needs: a solution with guaranteed income or one without it.
MLI is integrated within T. Rowe Price’s participant experience, which includes access to a retirement income estimator for the ability to tailor retirement savings into the managed payout investment and QLAC, optimizing monthly income. Participants who choose MLI will receive payments from the managed payout investment for the first 15 years of retirement, and then guaranteed QLAC payments from the insurer will continue for the participant’s lifetime. T. Rowe Price accepts the fiduciary responsibility for the selection and monitoring of the QLAC provider.
“Our collaboration with T. Rowe Price on MLI underscores our commitment to providing retirees with financial security,” said Michael Oler, head of Defined Contribution Lifetime Income at Pacific Life. “MLI represents an innovative advancement in retirement planning. By pairing MLI’s robust approach to asset management with the security of a QLAC, we are creating a simple yet dynamic approach to helping participants retire more confidently. This holistic design is raising the bar for lifetime income solutions.”
T. Rowe Price’s latest 401(k) client data shows a growing trend of plan participants maintaining their assets in-plan after retirement, with 52% aged 60 and older staying in-plan for at least four years after separating from service. The latest white paper from the firm explores this trend and how a drawdown strategy paired with a deferred annuity may better match the needs of retirees who wish to maximize guaranteed income and maintain liquidity.
“Our goal is to consistently stay at the forefront of our clients’ needs,” Negrón added. “We aim to simplify the transition into retirement and to offer solutions that can give retirees the financial confidence and peace-of-mind in this new phase of life.”
SEE ALSO:
• T. Rowe Price Launches Personalized TDF
• 401(k) Participants Express Strong Interest in Guaranteed Lifetime Income