TIAA’s RetirePlus In-Plan Income Option Reaches $30B

Assets jump on demand for guaranteed lifetime income; meanwhile, NAPA announces retirement income certificate program for advisers.

TIAA’s default workplace retirement plan solution providing participants access to a guaranteed-interest annuity has grown from $10 billion to $30 billion in assets in about two years, the firm announced Wednesday.

TIAA’s RetirePlus is now being used by more than 400,000 participants across 500 institutional clients, up from 250,000 participants as of 24 months ago, according to the retirement income provider and recordkeeper. The New York-based firm attributes the growth to demand for a default solution that offers a pension-like income option for participants.

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TIAA has a long history of providing annuity-backed retirement income products to participants when it started doing so for 403(b) plans about 100 years ago. It introduced a custom default product for defined contribution plans generally in 2014, and then launched RetirePlus in 2018, according to company statements.

“TIAA fundamentally believes that all retirement plans in the U.S. should offer participants the option to have a monthly retirement paycheck as long as they live,” said Colbert Narcisse, chief product and business development officer at TIAA, in a statement. “RetirePlus is one of the vehicles to provide this retirement paycheck by offering guaranteed income in retirement and guaranteed growth during accumulation – all at a potentially lower plan cost.”

Narcisse announced earlier this month an expanded leadership role to oversee TIAA’s institutional lifetime income team. Christopher Stickrod was named executive vice president and product general manager for institutional managed solutions; he had previously been with TIAA’s Nuveen asset management division.

TIAA’s RetirePlus can be offered as a qualified default investment alternative that puts participants into an investment portfolio including its TIAA Traditional annuity, which then allows participants to convert some or all their savings into a “personal pension” in retirement.

Through the offering, plan sponsors can “create built-in guarantees during asset accumulation and distribution, reduce default option costs, tailor default options based on its participant’s demographics, and allow participants to create guaranteed lifetime income in retirement,” according to TIAA.

New Retirement Income Training

Meanwhile, if retirement advisers want to learn more about offering retirement income to plan sponsor clients, they can now get a certificate set up by the National Association of Plan Advisors.

The DC-based association announced the Retirement Income for 401(k) Plans Certificate program on Wednesday designed for advisers to “evaluate, explain and implement retirement income solutions for clients.”

The program is being offered in five interactive modules for advisers to take on their own schedule and is free for NAPA members due to sponsoring that include TIAA’s Nuveen, AllianceBernstein, Allianz, Income America, PGIM, and more.

“401(k) plans are tremendously successful workplace savings programs, but they are not yet truly retirement plans,” said Brian Graff, CEO of the American Retirement Association and executive director of NAPA, in a statement. “Retirement income solutions have the promise of addressing this gap, enabling participants to receive income in retirement from plan investments.”

A recent survey by Greenwald Research noted that many plan sponsors are hesitant to offer participants retirement income options due to the “three Cs” of complexity, cost, and choice. The firm reported that 59% of plan sponsors view in-plan income as “too complex”; the surveying included 503 companies with at least 50 employees.

Product Partnerships – 2/21/24

Morningstar Wealth announces addition of SMAs; Orion expands access to Clark Capital’s Navigator Total Wealth Strategies; SUBSCRIBE adds T. Rowe Price and Oak Hill Advisors to client roster.

Morningstar Wealth Adds SMAs to the U.S. Wealth Platform

Morningstar Wealth announced the addition of third-party separately managed accounts to its U.S. wealth platform. The additions expand the range of investment choices advisers have to build portfolios and holistic unified managed accounts, according to the division of Morningstar Inc.

The third-party SMAs have been curated from asset management firms including AllianceBernstein, Congress Asset Management, John Hancock Investment Management, Lazard Asset Management, Putnam Investments and WCM Investment Management.

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“Morningstar’s dedication to empowering advisers is core to why we implemented a manager selection process leveraging our renowned manager research team to provide a curated selection of investments available on the Wealth Platform,” Cindy Galiano, managing director of U.S. Wealth Platform & Investment Solutions at Morningstar Wealth, said in a statement. “Here, advisers can readily access vetted investment options to best serve their clients, eliminating the need to navigate a vast marketplace.”

SMAs have experienced substantial growth in the investment landscape, doubling their assets under management to nearly $2 trillion since 2019, according to research Morningstar cited from Cerulli Associates. The consultancy expects this growth trend to persist, with SMAs projected to reach $3 trillion in the near future.

Orion Expands Adviser Access to Clark Capital’s Navigator Total Wealth Strategies

Orion Advisor Solutions has expanded adviser access to Navigator Total Wealth Strategies from Clark Capital Management Group, an independent asset manager, via its Orion Portfolio Solutions platform.

“We’re excited to expand adviser access to Clark Capital’s Navigator Total Wealth Strategies, offering more options to use their custodian of choice at Orion,” Ryan Beach, president of Orion Wealth Management, said in a statement.

These institutional quality strategies are actively managed, combining multiple strategies and asset classes into a single account. Strategies are available in five risk comfort zones and are available in tax-aware formats, according to the announcement. The strategies, previously exclusive to OPS clients who custody assets with Charles Schwab, are now also accessible for advisers with custody at Fidelity Investments.

“In addition to the strategies, advisers have access to our dedicated high-net-worth support team and time saving resources to help them grow and retain their business with affluent clients,” Chris Cullen, EVP and chief distribution officer at Clark Capital, said in a statement.

SUBSCRIBE Adds T. Rowe Price and Oak Hill Advisors to Client Roster

SUBSCRIBE, an operating system for alternative investments, announced that T. Rowe Price and its private markets platform, Oak Hill Advisors, have joined the SUBSCRIBE platform with the goal of enhancing digital onboarding and electronic subscription document workflow for their wealth management customers.

“Our enterprise platform solution offers leading wealth management firms a comprehensive pre-trade, trade, and post-trade suite of services to support the entire investment life-cycle of their private funds,” Rafay Farooqui, founder and CEO at SUBSCRIBE, said in a statement.

SUBSCRIBE’s platform allows wealth management firms and their financial advisers to transact and manage their alternative funds in one place, regardless of where those funds may have been sourced, according to the announcement. The platform centralizes investor data, funds and digitizes the fund investment workflows that financial advisers require to scale their allocations in the private markets.

“The streamlined platform of SUBSCRIBE will help retail investors unlock institutional-quality private credit access and the potential benefits that come with investing in the asset class, including premium yields and steady income,” Doug Keller, head of intermediary alternatives for T. Rowe Price’s U.S. Intermediaries division, said in a statement.

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