This article was originally posted by Plan Adviser.
By Alex Ortolani
With the announcement, Transamerica becomes the first recordkeeper to offer State Street’s TDF with an embedded annuity, while ADP adds Income Solutions from Hueler.
Recordkeepers Transamerica Corp. and ADP Inc. both announced separate retirement income options with annuities that will now be available to plan participants.
On Thursday, Transamerica announced it is offering the State Street GTC Retirement Income Builder series to its recordkeeping platform. The target-date-fund series has an annuity embedded in its glide path as a separate asset class, allowing for liquidity and portability to other plans, according to the announcement.
State Street’s builder TDF is offered through a partnership announced in April with ARS, formerly Annexus Retirement Solutions, that embeds ARS’s Lifetime Income Builder annuity into the TDF glide path. Global Trust Co. is the fiduciary and trustee of the investment vehicle, which can also be used as the qualified default investment alternative in a plan.
ARS and State Street teamed up on the project as “advisers and plan sponsors have been asking for a solution that offers lifetime income, while still maintaining the benefits of a traditional TDF: most critically growth opportunity, liquidity and the ease of use/elimination of participant decisions,” an ARS spokesperson wrote via email. “This target-date series is able to deliver lifetime income without sacrificing these core benefits that have made TDFs successful over decades.”
The spokesperson said the firm is connecting to “multiple recordkeepers” and that it would be announcing a second “top-tier recordkeeper” offering the product next year.
The fund targets a 6% annual income rate and includes Transamerica Life Insurance Co.’s stable value product.
“We recognized that the industry was still asking participants to make decisions on solutions they didn’t understand,” Dave Paulsen, chief distribution officer at ARS, said in a statement. “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.”
ADP Goes With Hueler
Separately, ADP confirmed it has brought the Hueler Companies’ Income Solutions onto its recordkeeping platform.
The Hueler solutions offer participants the chance to use workplace retirement savings to identify personalized, institutionally priced annuity options to create a retirement income stream.
“Hueler is recognized as a leading provider of retirement income annuity solutions in the marketplace,” an ADP spokesperson wrote in an emailed statement. “Their program offers access to a variety of insurance companies on their platform to give participants the ability to select a solution best suited for their personal financial needs.”
The country’s second-largest recordkeeper for plans with less than $10 million in assets, according to PLANSPONSOR’s 2023 Recordkeeping Survey, also noted that “Hueler has extensive experience working with retirement plans of all sizes.”
Pensions & Investments first reported ADP’s use of the offering.