Annexus and State Street will create an annuity program in the plan

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What do you want to know

  • Three insurers will feed the indexed annuity behind the program.
  • State Street and Annexus say plan sponsors should be able to use the new product like QDIA.
  • Annexus is also working on an annuity effort in the plan with Nationwide.

State Street Global Advisors will use a feature developed by Annexus to persuade employers to add lifetime income options to 401(k) plans.

State Street is placing the Annexus Lifetime Income Builder annuity program in a new target date fund for 401(k) plan sponsors.

State Street is an asset manager with $4.1 trillion in assets under management.

Annexus is a designer of annuity products. Its Annexus Retirement Solutions arm is also participating in an in-plan annuity product project with Nationwide.

why is it important

The new Annexus-State Street alliance is an example of every community setting up the Retirement Enhancement Act, or Secure Act, in action.

A Secure Act provision was designed to address some of the fiduciary responsibility concerns that had slowed 401(k) plan sponsors’ adoption of annuity options.

For current players in commercial pension services, the Secure Act could be a defense against efforts to transfer workers to government-run pension programs.

For retail retirement planners, the new emphasis on annuity options in the plan could lead to:

  • More competition for retail annuities and other individual pension plans.
  • More promotion and interest in all sorts of revenue planning endeavors.
  • A new responsibility for holistic advisors to see if a client has access to an employer-sponsored integrated annuity option and how that option might fit in with the client’s other assets and options.

machinery

The Annexus feature combines non-variable indexed group annuities with a lifetime guaranteed withdrawal benefit.

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