Vestwell is partnering with TIAA to launch a lifetime income solution on its platform in 2025.
The TIAA Secure Income Account (SIA), a guaranteed lifetime income solution, will be available through target-date structures available to 401(k) and 403(b) plans on the Vestwell platform.
According to an announcement Wednesday, the solution will be available to all Vestwell partners and supported by TIAA and Vestwell. The SIA aims to offer guaranteed interest for participants saving for retirement, along with a pension-like retirement income to help cover everyday living costs for retirees. TIAA and Vestwell assure that amounts saved in the SIA are protected in volatile markets.
“Addressing retirees’ financial security is an essential component of evaluating modern solutions to close the savings gap,” said Aaron Schumm, founder and CEO of Vestwell. “We are proud to work with TIAA, a company that shares our commitment to expanding access to industry-leading saving and retirement solutions, including guaranteed lifetime income, through the workplace.”
TIAA expects to see greater interest from advisors and clients, noting how legislation in recent years has lessened hurdles in offering annuity options. The SECURE Act contained several provisions that expanded access to lifetime guaranteed options when signed into law in 2019.
“With the original SECURE Act in 2019 removing barriers to offering lifetime income solutions in 401(k) plans, we are seeing a greater appetite from advisors and employers of all sizes to offer retirement income plans with annuities as a core component,” said Colbert Narcisse, chief product and business development officer at TIAA. “Electing lifetime income can offer employees a sense of security, with the assurance they will have guaranteed income through retirement.”
The agreement follows a strategic investment from TIAA Ventures—the firm’s venture capital investment program—in Vestwell’s Series D round funding in 2023.
The partnership is one of several expansions on Vestwell’s part. In June, the firm announced its collaboration with J.P. Morgan Asset Management to jointly distribute Everyday 401(k), J.P. Morgan’s workplace savings platform. Earlier in the year, Vestwell revealed its new partnership with Alera Group, in launching a workplace retirement plan solutions for organizations with fewer than 100 employees.
Vestwell has also been active in servicing several new state savings programs, including Delaware EARNS and New Jersey’s RetireReady NJ.