Assets for TIAA and Nuveen’s lifetime income target-date solutions reached $35 billion, the two companies announced today in a release.
The suite of lifetime income-embedded target-date offerings include the TIAA RetirePlus solution, the TIAA Secure Income Account (SIA), and the new Nuveen Lifecycle Income CIT series (NLI).
The TIAA RetirePlus platform is a qualified default investment alternative (QDIA) for the 403(b) and nonprofit market, while the TIAA Secure Income Amount works as a fixed annuity like its traditional counterpart but is specifically designed to be used as an allocation within managed accounts or custom target-date portfolio strategies. This account is also embedded within the Nuveen Lifecycle Income CIT series, a CIT target-date solution that allows participants to convert a portion of their holdings into guaranteed income at retirement.
Nuveen began offering its NLI solution in August 2024, and in March 2024, it was activated for 19 defined contribution (DC) plan sponsors who chose to map investment from prior default solutions, the organization added in a statement.
“We partner with many of the nation’s top retirement plan advisors and consultants who see the need for lifetime income in 401(k) plans,” said Brendan McCarthy, head of Nuveen Retirement Investing. “They recognize NLI as an easy solution for employers to provide their employees with the option of a guaranteed paycheck for life through the familiar structure of a target date fund.”
TIAA touches on the growing interest among guaranteed lifetime income solutions, as more participants search for “pension-like” tools in preparing for retirement and curtailing longevity risk.
A 2023 TIAA Institute survey found that while people are living longer, a growing number are unprepared to fund their retirement. Currently, on average, a 67-year-old retiree will live to around age 90, found the research. However, TIAA reports that the harmful effect of outliving income among participants is much greater than the negative impact of over saving.
“We’re facing a very real retirement crisis in our country,” said Kourtney Gibson, chief institutional client officer for TIAA.
As of 2022, TIAA has paid over $5.6 billion in lifetime income to retired clients and has $1.28 trillion in assets under management (AUM) as of December 31, 2023. Nuveen, the investment manager of TIAA, has $1.1 trillion in AUM under June 30, 2023.
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