AllianceBernstein has launched Secure Retirement Strategies (SRS), a target-date solution that provides guaranteed lifetime retirement income to participants of large defined contribution (DC) plans.
The solution is backed by multiple insurers – AXA Equitable Life Insurance Company, Lincoln Financial Group and Nationwide Financial.
This solution integrates guaranteed lifetime income into a multi-manager target-date fund, freeing plan sponsors from dependence on any single insurance company or investment manager.
According to AllianceBernstein, SRS is simple for participants because the target-date fund automatically invests in a guaranteed lifetime withdrawal benefit.
Unlike a traditional fixed annuity, this insurance provides a guaranteed lifetime income stream while giving participants full access to their account balance at all times.
The amount of lifetime income may increase in good markets but will not decrease in poor markets, claims the company.
AllianceBernstein Defined Contribution Investments (ABDC) head Thomas Fontaine said that the 2008 financial crisis left many participants uncertain about their retirement security and has underscored the need to provide lifetime income within DC plans.
Single-insurer products are available today, but based on our conversations with large plan sponsors, multiple insurers are a ‘must have’ for their guaranteed retirement income offerings. SRS is specifically designed to meet the needs of plan fiduciaries who want to diversify the insurers providing their retirement income guarantee, Fontaine said.