COLUMBUS, Ohio – Nationwide, in partnership with Capital Group, home of American Funds, today announced the NCIT American Funds Lifetime Income Builder Target Date Series (The TDF Series). Packaged as a new generation target date fund, it incorporates Lifetime Income Builder, a fixed indexed annuity with a guaranteed lifetime withdrawal benefit invented by Annexus Retirement Solutions that adds to Nationwide’s suite of in-plan guarantees. The TDF Series will be available as an investment option in defined contribution plans and is designed to help participants optimize growth potential, and when the time comes, generate guaranteed income that will last a lifetime.
The TDF Series is financially engineered to deliver a total income of 6% at the projected retirement start date. It leverages several of American Funds’ proprietary funds, distinctive investment management, and 90-year history of helping investors secure their financial futures. The underlying mutual funds are actively managed for growth and/or income opportunity by 64 portfolio managers who average 25 years of experience.
“Our product development philosophy is centered on the participant, and this latest offering rounds out our suite of in-plan guarantee solutions which are all designed to help generate lifetime income,” said Eric Stevenson, president of Nationwide Retirement Solutions. “Our partnership with industry leaders Capital Group and Annexus Retirement Solutions reinforces our commitment to helping build secure financial futures by providing participants an income solution that supports them not only up to – but all the way through – retirement.”
“Lifetime Income Builder will leverage the proven building blocks of the American Funds, combined with Nationwide’s glidepath and lifetime income experience to provide participants with an effective source of retirement income, particularly in this low yield environment,” said Brendan Mahoney, head of Institutional Retirement Strategic Growth at Capital Group.
The TDF Series turnkey solution offers plan participants a familiar and growth-focused TDF investing experience, including risk-mitigating protection and income guarantees designed to maximize and deliver lifetime income. For plan sponsors, it provides a QDIA-compliant structure and a combination of liquidity, portability and ease of use that has been largely missing from previous in-plan income solutions.
The TDF Series is structured as a Collective Investment Trust and includes Lifetime Income Builder, a group fixed indexed annuity (FIA) with a guaranteed lifetime withdrawal benefit (GLWB). This structure enables participants to participate in the market during accumulation awhile protecting their future targeted income in retirement. The TDF Series is set to launch this fall.
“Built-in income guarantees prevent the possibility that participants will outlive their money,” said Dave Paulsen, chief distribution officer for Annexus Retirement Solutions. “A lock-in feature applies protection guarantees to remove sequence of returns risk. But the real game-changer is its ability to provide a daily valuation of the fixed indexed annuity. Our patent-pending innovation embeds Lifetime Income Builder within a target date fund enabling participants to purchase a fund with a fixed index annuity on a daily basis. This allows participants to maintain complete control over their savings by providing full liquidity of assets for the life of the product.”