The recordkeeping powerhouse joins a consortium of industry
leaders to deliver lifetime income through innovative target date
series
SCOTTSDALE, Ariz., Nov. 9, 2023
/PRNewswire/ -- ARS (previously Annexus Retirement Solutions)
announced today that Transamerica is adding the State Street GTC
Retirement Income Builder (the Series) to its recordkeeping
platform, joining State Street Global Advisors, Global Trust
Company (GTC) and ARS in helping more Americans become retirement
ready. This new industry innovation in target date funds provides
lifetime income, while preserving growth opportunity and
participant control of the assets.
Transamerica is dedicated to helping participants secure their
financial futures and believes in-plan income solutions can be one
of the most critical components to helping solve today's retirement
income crisis. It is estimated that half of U.S. retirees are at
risk of being unable to maintain their pre-retirement standard of
living, based on current savings levels.1 In addition to
lack of savings, life expectancies are rising, and many investors
do not have the expertise or guidance needed to create a plan to
make their savings last throughout retirement.
"Transamerica is keenly focused on delivering solutions that can
help participants better prepare for retirement," said Phil Eckman, president of Transamerica Workplace
Solutions. "By adding this target date series as an option for plan
sponsors and their participants, we deliver a much-needed
investment option that is designed to generate both growth and
lifetime income, not one over the other."
The Series combines State Street Global Advisors' cost-efficient
asset management expertise, Transamerica Life Insurance Company's
industry leading stable value products with ARS' patent-pending
lifetime income solution, Lifetime Income Builder.2 The
solution, which launched earlier this year, is embedded
directly within the target date fund's glidepath as a separate
asset class, which helps promote growth opportunity and permits
liquidity and portability. The Series is designed to be used as a
qualified default investment alternative (QDIA).
"Transamerica has always had a progressive approach to
delivering new solutions and is a natural partner to offer this
investment," said Dave Paulsen,
chief distribution officer at ARS. "Historically, lifetime income
solutions require a tradeoff of growth opportunity or liquidity,
but we've removed those tradeoffs within this product design."
One important component of the product design is the simplicity
on the participant level. "We recognized that the industry was
still asking participants to make decisions on solutions they
didn't understand," said Paulsen. "By embedding lifetime income at
the fiduciary investment management level, we eliminated those
difficult decision points for the participant, while delivering the
benefits they want."
The Series helps mitigate sequence of return risk by capturing
quarterly high-water marks3 on the full account value
and utilizing the Transamerica Stable Value offering for those near
and in retirement—helping protect participants' savings and
providing lifetime income. The fund targets a 6% annual income
rate4 at income activation, calculated using the highest
captured high-water mark of the fund. The inclusion of
Transamerica's stable value product provides participants the
benefit of a principally protected investment while reducing their
total expected return volatility over time. Just like other target
date funds, the investment does not require participant-level
decisions, making it simple and easy for a participant to invest
and to receive lifetime income.
"We have a strong relationship with Transamerica already and are
thrilled to expand our partnership with this new solution, helping
more Americans retire with lifetime income," said Bob McGowan, managing director and head of the
Financial Institutions Group at State Street Global Advisors.
Transamerica is the most recent top-rated recordkeeper to add
the Series to its platform, and the investment will be available
across multiple recordkeeping platforms in the coming months.
Participants who choose to keep their assets in-plan and under
Transamerica's administration will gain greater long-term value by
benefiting from institutional pricing all the way through
retirement.
About Transamerica
With a history that dates back more than 100 years, Transamerica
is a leading provider of life insurance, retirement, and investment
solutions, serving millions of customers throughout the United States. Transamerica's dedicated
professionals focus on helping people live their best lives through
saving, investing, and protecting their loved ones. Transamerica is
dedicated to building America's leading middle market life
insurance and retirement company, with unique access to the large
and growing middle market consumer via World Financial Group and US
retirement recordkeeping. Transamerica provides a broad range of
quality individual life insurance policies, workplace supplemental
insurance benefits, workplace retirement plans, individual
retirement accounts, and investment products including mutual
funds, annuities, stable value solutions, as well as investment
management services.
In 2022, Transamerica fulfilled its promises to customers, paying
more than $46 billion in insurance,
retirement, and annuity claims and benefits, including return of
annuity premiums paid by the customer. Transamerica's head office
is in Baltimore, Maryland, with
other major operations in Cedar Rapids,
Iowa, and Denver, Colorado.
Transamerica is part of the Aegon group of companies. Each Aegon
company is solely responsible for its own financial conditions and
contractual obligations. Based in the
Netherlands, Aegon is an international financial services
holding company.
About State Street Global Advisors
For four decades, State Street Global Advisors has served the
world's governments, institutions and financial advisors. With a
rigorous, risk-aware approach built on research, analysis and
market-tested experience, we build from a breadth of index and
active strategies to create cost-effective solutions. And, as
pioneers in index, ETF, and ESG investing, we are always inventing
new ways to invest. As a result, we have become the world's
fourth-largest asset manager5 with US $3.8 trillion6 under our care.
About Global Trust Company
GTC (Global Trust Company, Inc.) is a State of Maine chartered non-depository trust
company providing fiduciary and trustee services for some of the
largest and most complex institutional asset managers and asset
owners. Founded in 2008 as a subsidiary of Northeast Retirement
Services (NRS), we currently manage, as of September 30, 2023, $103
billion across 80 trusts and over 300 funds. GTC is a
leader in the design and implementation of proprietary collective
investment trusts (CITs) and has demonstrated a continued
willingness and ability to launch complex fund structures for the
benefit of our partners and institutional investors. NRS and
GTC are part of the BPAS Trust Services group, a wholly-owned
subsidiary of Community Bank System, Inc. (CBS, NYSE:
CBU).
About ARS
ARS (previously Annexus Retirement Solutions) designs, develops,
and facilitates distribution of institutional lifetime
income products that help Americans solve their biggest challenge
in retirement—outliving their money. Founded in 2020 by the
leaders of Annexus Group, the company's over-arching philosophy
centers on delivering better participant outcomes through
innovation. It is led by industry veterans with a combined 175
years of experience in retirement plans, annuities, and asset
management. ARS is headquartered in Scottsdale, Arizona. Learn more about ARS
at www.annexusretirementsolutions.com.
1Center for Retirement Research at Boston College, THE NATIONAL RETIREMENT RISK INDEX:
AN UPDATE FROM THE 2019 SCF, January
2021.
2Lifetime Income Builder is a group fixed indexed
annuity with a guaranteed lifetime withdrawal benefit (a "FIA").
The withdrawal benefit is subject to the claims paying ability of
the insurers and insurers do not guarantee that participants will
receive lifetime income.
3The value of the target date fund account is
measured on the last business day of each calendar quarter and the
last business day of the month prior to income activation, and then
the highest measured value is locked in. The high-water mark is not
measured until the fund begins to allocate to the fixed indexed
annuity.
46% is a targeted percentage and there is no
assurance that the funds will be able to make payments that meet
the targeted percentage. Actual percentage may vary. See detailed
disclaimers at the end of this press release regarding actual
percentage.
5Pensions & Investments Research Center, as of
12/31/22.
6This figure is presented as of June 30, 2023 and includes approximately
$63 billion USD of assets with
respect to SPDR products for which State Street Global Advisors
Funds Distributors, LLC (SSGA FD) acts solely as the marketing
agent. SSGA FD and State Street Global Advisors are affiliated.
Please note all AUM is unaudited.
Important Risk Information:
Investing involves risk including the risk of loss of principal.
Such activities may not be suitable for everyone.
Each target date fund (TDF) in the Series is established by
Global Trust Company and held in the GTC Retirement Income Builder
Collective Investment Trust (the "Trust"). The Trust is a
bank-sponsored collective investment trust and not a mutual fund.
Global Trust Company serves as trustee of the Trust, manages the
Trust, and has ultimate investment authority for each fund in the
Series. State Street Global Advisors manages a portion of the
solution's underlying assets and provides Global Trust Company with
glidepath recommendations for the funds within the Series.
Lifetime Income Builder is a group fixed indexed annuity with a
guaranteed lifetime withdrawal benefit (a "FIA"). Each TDF may
invest in more than one FIA, collectively which are referred to as
"Lifetime Income Builder." Annexus Retirement Solutions is the
inventor of Lifetime Income Builder. The FIA guarantees are made to
the TDF, not to the participants. Participants are not
beneficiaries of any annuity contract. Lifetime Income Builder is
not provided by or guaranteed by Global Trust Company, State Street
Global Advisors, Annexus Retirement Solutions or any of their
affiliates.
Each TDF is designed to provide participants target annual
income of 6% at income activation and a target minimum lifetime
income percentage of 4.5%. The target percentages are goals and
there is no assurance that the funds will be able to make payments
that meet either target percentage. All income payments to
participants, regardless of the percentage, are always dependent on
the trustee.
The TDFs invest in FIAs that are intended to back the Trust's
investment objective, lifetime income. Each FIA is issued by an
insurance company to the trustee. The FIAs provide guaranteed
payments to the Trust and are subject to the claims-paying ability
of the issuing insurance companies. If the value of the other
investments in the fund reaches zero at or after income activation,
income payments are adjusted to the cumulative guaranteed
percentage provided to the Trust by the FIAs, which is targeted to
be the target minimum lifetime income percentage of 4.5%. The
actual annual income percentage and actual minimum lifetime income
percentage are dependent on economic factors and may be more or
less than what is targeted. There are possible, but extreme, market
conditions where the FIAs' cumulative guaranteed percentage that is
provided to the Trust could be less than 4.5%. Therefore, we use
the term "target minimum lifetime income percentage" to properly
reflect the potential for such scenario. In that scenario,
the FIAs would still provide guaranteed payments to the Trust,
but it would be something less than the targeted minimum of 4.5%,
and payment of income to the participants would remain dependent on
the trustee.
If a participant selects the joint income option offered by the
TDF, the actual payment percentages will be less than 6% and 4.5%,
but instead of income payments terminating upon the death of the
participant, income payments will continue to be made to the joint
beneficiary if the joint beneficiary outlives the participant.
Current target annual income and target minimum lifetime income
percentages reflect economic conditions at the time each TDF is
created. Future TDFs in the Series could have lower or higher
targeted percentages based on economic conditions at the time of
the TDF's creation. Please refer to the Offering Memorandum for
more information on the risks of not receiving income payments.
The TDFs are designed for investors expected to retire around
the year indicated in each TDF's name. When choosing whether to
invest in the TDF for which an investor age qualifies,
investors should consider whether they anticipate retiring
significantly earlier or later than age 65 even if such investors
retire on or near a TDF's target date. There may be other
considerations relevant to determining whether investment in the
TDF best meets their individual circumstances and investment goals.
The TDF's asset allocation strategy becomes increasingly
conservative as it approaches the target date and beyond. The
investment risks of each TDF change over time as its asset
allocation changes.
An investment in a TDF is not a bank deposit and is not insured
or guaranteed by the insurance companies, the trustee, State Street
Global Advisors, the Federal Deposit Insurance Corporation
("FDIC"), or any other government agency. The Trust is not insured
by the FDIC and is not registered with the Securities and Exchange
Commission.
Each FIA is issued by an insurance company to the trustee. The
FIAs do not create any third-party beneficiary relationships or
third-party beneficiary rights for any other person or entity. The
insurers do not guarantee that participants will receive lifetime
income.
The information provided herein does not constitute investment
advice and it should not be relied on as such. It should not be
considered a solicitation to buy or an offer to sell a security or
a product, or a recommendation of the suitability of any investment
strategy for a particular investor. It does not take into account
any investor's particular objectives, strategies, tax status or
investment horizon. You should consult your tax and financial
advisor.
The entities referenced above have collaborated together to
bring this solution to market; none of the collaborating listed
entities are affiliated entities.
© 2023 State Street Corporation – All Rights
Reserved.
6011641.1.1.AM.RTL
Exp. Date: 9/30/2024
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SOURCE Annexus Retirement Solutions