J.P. Morgan Asset Management today announced plans to launch SmartRetirement Plus, a unique retirement income solution for American workers.
SmartRetirement Plus will pair J.P. Morgan Asset Management's retirement investment funds and spending intelligence with AIG Life & Retirement's IncomEdge Control annuity. AIG Life & Retirement is an innovator in protected lifetime income solutions and a leading provider of annuities. J.P. Morgan Asset Management expects to expand the suite of annuities offered by third-party insurers through SmartRetirement Plus in the future.
SmartRetirement Plus will leverage J.P. Morgan's unique insights into spending and saving behavior of U.S. households to educate participants on how much income they will need in retirement and help them determine how to allocate balances accordingly.
The solution will provide options to direct retirement savings from J.P. Morgan Asset Management's retirement investment funds to a protected lifetime income product from AIG Life & Retirement, and options to help participants determine when to begin receiving this income.
Participants will also have the flexibility to make allocation decisions to account for their unique spending needs, all while maintaining access to their money. The new solution follows recent plan participant research from J.P. Morgan Asset Management, which reveals that 85% of participants would likely leave their balances in their plans post-retirement if there was an option to help generate monthly retirement income.
SmartRetirement Plus will be delivered through an intuitive digital experience that provides participants with information on how to convert retirement plan savings into retirement income. The participant journey will emphasize convenience and access to insights on typical spending and savings behavior to drive informed decision-making and simplify the user experience.
Supporting Participants Post-Retirement
Alongside these enhancements, the firm plans to modify its investment strategy across its JPMorgan SmartRetirement and SmartRetirement Blend target date funds, after each fund reaches its respective target retirement year (the year in its name) to incorporate the methodology used by the JPMorgan SmartSpending Funds, thereby integrating the two series.
The integrated series will use an asset allocation strategy designed with two main goals: promoting asset accumulation prior to the target retirement year (age 65), and supporting participants withdrawing a portion of their investment in the integrated funds each year over a 35 year period.
J.P. Morgan Asset Management will produce an annual sample withdrawal amount, a hypothetical example designed to balance income needs in the current year against the need for income in the future.
This feature for the integrated series is expected to be available in the first quarter of 2022. With nearly 7 out of 10 participants concerned about outliving their money in retirement, participants may use the sample withdrawal amount as a consideration in determining how much of their investment to withdraw each year.
"J.P. Morgan Asset Management is committed to solving the retirement income challenges of everyday people," said George Gatch, Chief Executive Officer, J.P. Morgan Asset Management. "With the decline in pension plan availability, the risk and responsibility of securing a sound retirement has been transferred from institutions to individuals, and we continue to evolve our SmartRetirement solutions to support participants through this transition."
"The retirement industry has been exploring the issue of retirement income for some time, and we believe the new SmartRetirement Plus solution and SmartRetirement changes can help more Americans successfully transition from saving during their working years to making the most of those savings in retirement," said Jed Laskowitz, Global Head of Solutions, J.P. Morgan Asset Management. "Our fully-integrated experience is built on our deep insight into the behavior of plan participants and helps educate participants seeking to map out their retirement income needs and identify retirement income sources."
"We are very pleased to be working with J.P. Morgan Asset Management to help employers deliver a simple process for their employees to turn retirement savings into protected lifetime income," said Rob Scheinerman, Chief Executive Officer, AIG Retirement Services. "We will help bring retirees the confidence and peace of mind that comes with creating a retirement income they can have for their entire life."
 The IncomEdge Control annuity is issued by The Variable Annuity Life Insurance Company (VALIC), Houston TX.
 VALIC is responsible for financial obligations of its protected lifetime income products, and guarantees are backed by the claims-paying ability of VALIC.
 J.P. Morgan Asset Management 2021 Defined Contribution Plan Participant Survey.
SOURCE J.P. Morgan Asset Management