lifetime income builder

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Defining a New Asset Class

Ever wonder how you can offer lifetime income without sacrificing growth, control, or simplicity? See how we did it.

Frequently Asked Questions


A target date fund (TDF) with Lifetime Income Builder maintains equal or better long-term accumulation compared to traditional TDFs because Lifetime Income Builder acts as a fixed income alternative. Think of Lifetime Income Builder as a separate asset class, with a daily valuation and growth similar to fixed income investments. In the TDF, Lifetime Income Builder replaces the fixed income portion of the portfolio, which enables the investment to provide lifetime income while also maintaining the growth potential of a traditional TDF.

No. A key design of a target date fund with Lifetime Income Builder is to ensure a participant maintains control with a fully liquid investment that they always have access to. That means they maintain control of their assets up to and all the way through retirement.

We turned Lifetime Income Builder into an asset class and fully embedded it into a target date fund. This makes the underlying experience for the participant the same as it would be with any traditional target date fund: a professionally managed solution that provides the same level of growth opportunity, control of assets, and requires no participant decisions. But unlike a traditional TDF, it also drives guaranteed income that a participant can never outlive and eliminates sequence of return risk along the way.

With our product design, we’ve eliminated complex decisions for the participant. We’ve done this by embedding Lifetime Income Builder into a target date fund where all those decisions are made at the investment management level on behalf of the participant. This creates a simple, easy, and automatic experience for participants.

One of the biggest challenges for participants comes in the years leading up to retirement as they face potential sequence of returns risk. The quarterly high-water mark1 feature built into our product eliminates that challenge. Once a HWM is locked in, a participant’s future income benefit can never decline due to market volatility.

Yes. Once income has been activated, the participant can choose when they want to take the income. They can turn that income on and off. Technically, the fund is making monthly distributions into an in-plan account, but the participant decides when they want to withdraw these income payments.

If a participant passes away, a target date fund with Lifetime Income Builder works just like any other target date fund. The entire account balance is paid out to the beneficiaries.

A target date fund with Lifetime Income Builder isn’t a point-in-time purchase where the participant buys the annuity and the benefit is driven by today’s interest rate environment. Instead, if interest rates go up, the participant will get the benefit of those rising interest rates, because it’s gliding into the solution on a monthly basis. Once it is set, a participant will never get less than the guaranteed rate, but they can get more.

Yes. Shortly prior to retirement, a participant chooses single life income or joint life income. The joint life income option pays retirement income for both spouses for the rest of their lives, and the remaining balance is paid out to beneficiaries upon their deaths.

A target date fund with Lifetime Income Builder does not wrap a portfolio with a guarantee. We did that on purpose because wrapping a portfolio creates an extra fee (typically 1%) on the entire fund. Instead, we embedded Lifetime Income Builder inside the target date fund to make it like any other asset class.

We built this solution to be easy for the participant. That means they don’t have to fill out any paperwork or sign any documents to have lifetime income.

The participant never needs to decide how much annuity to purchase or how much money to take in retirement.

No, there is no cost of living adjustment (COLA). Instead, we designed the solution to maximize income at retirement.

A target date fund with Lifetime Income Builder is unit-based. If participants need to take an early or emergency withdrawal, they’re selling units of their target date fund. Income is calculated from the number of units the participant owns and the high-water mark.

A target date fund with Lifetime Income Builder is built inside of a Collective Investment Trust (CIT). That helps keep the cost down and gives the flexibility for the asset manager to buy lifetime income on behalf of the participant.

We collapsed our target date fund with Lifetime Income Builder to three years to get the best pricing from insurance companies. With a smaller age band, there’s more predictability. Therefore, the insurance companies can pass on a greater benefit to the participants.

Yes, this solution is designed to be QDIA compliant. We can do that because it’s fully liquid, has growth similar to other target date funds, and allows a participant to be in complete control.

The quarterly high-water mark1 is based on the entire target date fund, not just the annuity portion of the portfolio.

Having age qualification for a vintage helps prevent a participant from selecting different vintages that may be to their detriment. This design element ultimately helps drive better outcomes.

The fund is embedded in a Collective Investment Trust (CIT), and that CIT trustee is responsible for many of the difficult income-related decisions that typically fall on the backs of the advisor, consultant, and plan sponsor.

A target date fund with Lifetime Income Builder is no different than other investments. Every investment product has implicit costs, a fact that many industry professionals overlook. Fixed income, for example, has a spread but the declared cost is of the mutual fund that owns that fixed income product. Our solution works the same way. The end cost to the participant of the overall TDF is clearly declared, and that investment has numerous underlying holdings – one being Lifetime Income Builder.

This solution has strong asset managers and insurance providers, and is designed to deliver better participant outcomes. Looking at the track record of the companies that bring the solution can give you a lot of comfort to be open to new innovation that can help solve the concerns of an overwhelming percentage of participants.

No. Income begins at the age of 652, but it is never annuitized. That means the participant maintains control all the way up to and through retirement.

One of the benefits of our solution is that it is simple, and it does not require participants to make difficult decisions. The solution is embedded in a target date fund and professionally managed within a glidepath which means both the accumulation and the decumulation experience is automatic for the participant.

Have more questions? Our team is here to help.


Joe Boan

Mike Cicotello

Jacob Adams

Adam Aronson

Patent Pending
This website is intended for institutional retirement industry professionals.

• Not a deposit • Not FDIC or NCUSIF insured • Not guaranteed by the institution • Not insured by any federal government agency • May lose value

This material is not a recommendation to buy, sell, hold, or roll over any asset, adopt a financial strategy, or use a particular account type. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person.

Lifetime Income Builder will be powered by an insured guaranteed income solution issued by an insurance carrier that the plan fiduciary has determined qualifies for the safe harbor provisions of ERISA section 404. All guarantees and protections are subject to the claims-paying ability of the issuing insurance carrier. Lifetime Income Builder does not directly participate in the stock market or any index. It is not possible to invest in an index. Withdrawals are subject to income tax, and withdrawals before age 59½ may be subject to a 10% federal tax penalty.