"We were a standalone company with a new idea where we brought a guaranteed income solution to the market," Boan said. "And we're going to continue to do that. So ownership structure doesn't change our path going forward."
It has been a very busy 2022 for ARS, a critical year for taking advantage of opportunities created when Congress passed the Setting Every Community Up for Retirement Enhancement Act in 2019.
Known as the SECURE Act, the law removed many of the barriers to adding annuities to retirement plans. Following a phase of platform development, ARS entered the year ready to shake up the plan market.
In recent months, the company developed the Annexus Lifetime Income Builder and signed a major deal for it with State Street Global Advisors. The Income Builder platform paves the way for lifetime income options within employee retirement plans -- a substantial market.
The platform embeds Lifetime Income Builder – a product that employs group fixed indexed annuities with a guaranteed lifetime withdrawal benefit – within the familiar and automatic structure of a target date fund.
ARS is also participating in an in-plan lifetime income project with Nationwide. So far, business is good, Boan reported.
"Currently, we're at about 10 total plans committed with more than 10,000 participants, and the ability to go after $700 million in assets in those plans," he said. "That's not what we have, but that's what's in those plans today."
Embedding annuity options within a target date fund represents a timely opportunity for workers to choose lifetime income and "set it and forget it," Boan explained. It is also a departure from the traditional annuity sales and ownership relationship.
"What makes it totally different is that the participant doesn't actually own an annuity contract with the insurance company," he said. "We've embedded the annuity as an asset inside of a target date fund. So the portfolio is professionally managed. There's no decisions that the individual needs to make along the way."
Next up, ARS will be launching a new annuity product through State Street, an asset manager with $4.1 trillion in assets under management. That launch is expected to take place before the end of 2022, Boan said.
"There's going to be a bidding process involved in that one. So there's multiple insurance companies that are supporting the guarantee and that solution," he added. "And we plan to launch with three [insurers], but we're in talks with significantly more."
Meanwhile, Boan and ARS are waiting to see if Congress passes companion legislation known as SECURE 2.0 before the end of the session. The bill would further ease the rules for lifetime income options. The timing seems to be right for another bill.
Several studies have found that fewer than four in 10 Americans have savings to cover unexpected expenses of $1,000, and 35% now have less in savings accounts than they did before the pandemic.
"We're getting very, very positive reception in the market," Boan said. "We have advisors and plans who don't decide necessarily to go with guaranteed income today. But it's what's on their mind. And it's what's on their participants' minds."
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.