SS&C Technologies Holdings Inc. announced Wednesday that it added the first fixed-index annuity to its defined contribution retirement income platform as demand for guaranteed income grows among participants.
SS&C is adding the Allianz Lifetime Income+ Annuity with the Lifetime Income Benefit to its recordkeeper clients and their participants. The partnership comes as SS&C has seen its annuity product offering—which has been in place for more than a decade—gaining traction.
“We’ve seen growth from the fourth quarter [of 2022] through the end of the first quarter has been dramatic,” says Larry McQuaid, vice president and head of business development for SS&C’s retirement solutions division. “We just crossed $1 billion in assets on the platform mark. It was a significant jump, as we’ve started to see a good portion of that just come on this year.”
The guaranteed-income option, which comes from the Allianz Life Insurance Co. of North America, adds to other annuities available on SS&C’s retirement income platform with annuity providers that include Equitable, Lincoln Financial Group and Income America 5ForLife. The latest addition from Allianz is portable, so participants can carry it with them if they move employers, a key factor that SS&C is glad the industry has been able to solve, according to McQuaid.
“That portability option is so important, so when someone goes from one recordkeeper to another, they can keep their investment with them,” he says.
Retail annuity sales have been booming for similar reasons as cited by McQuaid. On Tuesday, insurance industry trade group LIMRA announced that fixed-annuity sales doubled in the first quarter of 2023 to $70.9 billion, driving record sales for the fourth consecutive quarter. Sales of annuities within defined contribution plans, however, are still a nascent market, as plan sponsors have not traditionally offered them directly to participants in their workplace plans.
SS&C’s annuities are provided via recordkeepers through three main channels, according to McQuaid. One is a guaranteed minimum withdrawal benefit, which can be offered within a DC plan. Another is through a managed account offered to participants. A third is purchasing an annuity outside of the plan but on the platform, using work income.
“A lot of people use the model of having your expenses covered through protected income … and I think that is starting to resonate with a lot of people,” McQuaid says.
SS&C, which is based in Windsor, Connecticut, declined to name the recordkeepers with which it works, noting partnerships with “numerous leading providers in the industry.” McQuaid says the firm started offering annuities in workplace retirement plans in 2008, when the financial crisis made protecting against downside risk important. At that time, he says, the market was not ready.
Now the firm provides a micro-site to recordkeepers that explains the annuity offering to participants, including comparisons of the different retirement income options, and also feeds that information to retirement plan advisers.
“That education element is so important,” McQuaid says.