Leading Retirement Firms Launch "Income America" With In-Plan Target Date Series And A Lifetime Income Guarantee

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Mar 03, 2021, 09:00 ET

KANSAS CITY, Mo., March 3, 2021 /PRNewswire/ -- A consortium of leading retirement firms that includes American Century Investments, Lincoln Financial Group, Nationwide, Prime Capital Investment Advisors, SS&C Technologies, Wilmington Trust, N.A. and Wilshire today announced the launch of a new in-plan target date series with guaranteed income* for life designed to help retirement plan participants transition from the accumulation phase of retirement investing to the decumulation stage. Called "Income America^TM5ForLife," this new solution, which is designed to be used as a plan's Qualified Default Investment Alternative (QDIA), strives to address one of the most pressing issues for those at or near retirement: the need for guaranteed monthly retirement income.

American workers see great value in products that provide guaranteed income in retirement, according to participants in a consumer study on this topic¹. More than seven in 10 surveyed said they would use a guaranteed income product if offered in their employer-sponsored retirement plan. The same number said these solutions would make it easier to budget their money in retirement, and they would feel more confident in preparing for retirement. Plan participants are also focused on protecting their savings from market volatility — as a result of the financial impacts of COVID-19, half of retirement savers are more concerned about future market volatility than they were before the pandemic².

"Working together with our retirement industry partners, we developed the 'Income America' consortium to offer a defined contribution solution that helps plan participants concerned about outliving the money they've set aside for retirement," said American Century Investments President and Chief Executive Officer Jonathan Thomas. "Our recent 2020 Retirement Plan Participant study indicates that more than 80 percent of participants would keep their assets in their retirement plan if they had an income option. We believe Income America provides an innovative approach to helping more people achieve a successful and comfortable retirement."

How Income America Works
Income America is a series of portfolios built on a target date glide path designed by American Century and held in a portable, non-proprietary, multi-manager Collective Investment Trust (CIT). It is available as both a traditional series of target date portfolios, Income America, and as a companion series of target date portfolios with an in-plan Guaranteed Lifetime Withdrawal Benefit (GLWB), known as Income America 5ForLife. Either series can be used as a plan's QDIA. The pricing power of the consortium firms allows Income America to deliver a cost-effective Collective Investment Trust vehicle, resulting in lower fees for participants. Income America 5ForLife is designed to be SECURE Act-compliant and to meet ERISA 404 and 3(38) fiduciary requirements, relieving plan sponsors of liability for the screening of GLWB providers, fund managers, stable value managers and glide path managers. Both Income America series are competitively priced and Income America 5ForLife is portable among major recordkeepers where Income America 5ForLife is available. Both series are fully liquid, and participants can withdraw their Income America account balance from the series at any time without penalty.

"By partnering on this important new solution, we look forward to continuing to help retirement plan participants not just understand how to save for the retirement they envision, but help them take those savings and translate them into a monthly check that will last through retirement," said Jamie Ohl, Executive Vice President, President, Workplace Solutions, Head of Life & Annuity Operations, Lincoln Financial Group. "As more Americans rely on their workplace retirement plan as their primary savings vehicle, it is more important than ever that we focus on the outcomes that will help them build financial security — because in planning for retirement, the ultimate outcome is income."

By offering Income America 5ForLife in their retirement plan, employers can help ensure their employees will have access to a protected, guaranteed stream of income in retirement, giving them more confidence in their financial futures. When a plan participant moves accumulated retirement assets to Income America 5ForLife, the initial value of the account plus ongoing contributions (less withdrawals) establish an "income base" on which an annual five percent guaranteed lifetime payment will be based once the income feature is activated when the participant reaches age 65 or older. If the market value of the participant's account has appreciated and is more than the sum of net contributions at age 65, the income base will "step up" to the higher market value amount (a one-time event) when the participant turns age 65. Alternatively, if the market value of the account at age 65 is lower than the amount of net contributions to date, the income base that determines the payout amount will remain set at the net contribution level. A joint option is also available but will lower the payout percentage.

"Income America 5ForLife is the latest solution that leverages our expertise as a top distributor of retirement plans and a leading insurer of in-plan guarantees, to provide plan sponsors and their participants with a simple, low cost, portable solution to meet their retirement income needs," said Eric Henderson, president of Nationwide Annuity. "According to Nationwide's recent Advisor Authority study, demand is strong, with two-thirds of Millennial investors and Gen X investors indicating they are likely to incorporate in-plan guarantees within their qualified retirement plans."

Prime Capital Investment Advisors Chairman Scott Colangelo said, "We are honored to consult with this diverse group of contributors on the initial product design. Given the strong interest in these solutions, we expect advisors and plan participants to gravitate toward Income America's unique offering."

Consortium Member Roles and Responsibilities

American Century Investments: Target date glide path provider and underlying fund manager; firm's glide path is designed to provide greater certainty of outcomes for a broader number of participants
Lincoln Financial Group and Nationwide: Stable value fund management; recordkeeping platform providers; guaranteed income providers with S&P life insurance company ratings of A or better
Prime Capital Investment Advisors: Product consultant responsible for product design, including sourcing consortium partners and providing the investment universe for Income America 5ForLife
In addition to the primary consortium participants, other prominent retirement industry firms involved with Income America include:
Fidelity Investments, Vanguard, and Prudential: Serve as underlying fund managers
SS&C Technologies: Provides the Retirement Income Clearing and Calculation Platform (RICC), a middleware application designed to facilitate the efficient distribution and servicing of in-plan guaranteed income products across various recordkeepers and participating insurers
Wilmington Trust: Serves as trustee of the collective investment trust and ERISA 3(38) investment manager fiduciary
Wilshire: Investment advisor fiduciary under ERISA 3(21) responsible for recommending the glide path manager, GLWB providers, underlying fund products and stable value offerings to the trustee from an investment universe selected by the product consultant for each category

MEDIA CONTACTS:
     American Century: Laura Kouri, [email protected], 816-516-7729
     Lincoln Financial Group: Lucy MacNichol, [email protected], 484-655-4410
     Nationwide: Deborah Newman, [email protected], 502-587-3858
     Prime Capital Investment Advisors: Karyn Baldwin, [email protected], 610-909-1789

About American Century Investments
American Century Investments is a leading global asset manager focused on delivering investment results and building long-term client relationships while supporting research that can improve human health and save lives. Founded in 1958, American Century Investments' 1,400 employees serve financial professionals, institutions, corporations and individual investors from offices in New York; London; Hong Kong; Frankfurt; Sydney; Los Angeles; Mountain View, Calif.; and Kansas City, Mo. Jonathan S. Thomas is president and chief executive officer, and Victor Zhang serves as chief investment officer. Delivering investment results to clients enables American Century Investments to distribute over 40 percent of its dividends to the Stowers Institute for Medical Research, a 500-person, non-profit basic biomedical research organization. The Institute owns more than 40 percent of American Century Investments and has received dividend payments of $1.7 billion since 2000. For more information about American Century Investments, visit www.americancentury.com.

About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help people take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, and guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE: LNC) and its affiliates. The company had $303 billion in end-of-period account values as of December 31, 2020. Lincoln Financial Group is a committed corporate citizen included on major sustainability indices including the Dow Jones Sustainability Index North America and FTSE4Good. Dedicated to diversity and inclusion, we earned perfect 100 percent scores on the Corporate Equality Index and the Disability Equality Index, and rank among Forbes' World's Best Employers, Best Large Employers, Best Employers for Diversity, and Best Employers for Women, and Newsweek's Most Responsible Companies. Learn more at: www.LincolnFinancial.com. Follow us on Facebook, Twitter, LinkedIn, and Instagram. Sign up for email alerts at http://newsroom.lfg.com.

About Nationwide
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor's. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow the firm on Facebook and Twitter.

About Prime Capital Investment Advisors
Prime Capital Investment Advisors provides a client-centric team approach to full-service financial planning, including fee-based asset management and wealth management through its Prime Capital Wealth Management brand. PCIA currently has 26 locations throughout the United States, with investment advisor representatives serving clients across the nation. Advisory services offered through Prime Capital Investment Advisors, LLC. ("PCIA"), a Registered Investment Adviser. For more information, visit www.pciawealth.com.

About SS&C Technologies
SS&C is a global provider of services and software for the financial services and healthcare industries. Founded in 1986, SS&C is headquartered in Windsor, Connecticut, and has offices around the world. Some 18,000 financial services and healthcare organizations, from the world's largest companies to small and mid-market firms, rely on SS&C for expertise, scale and technology.

About Wilshire
Wilshire Advisors LLC is a leading global investment technology and advisory company, dedicated to improving outcomes for investors worldwide. Founded in 1972, Wilshire advises on over $1.1 trillion in assets and manages $76 billion in assets. Specializing in innovative investment solutions, consulting services and multi-asset analytics, Wilshire serves more than 500 institutional and intermediary clients worldwide, delivering a high quality, coordinated platform of client-centric investment solutions that leverage the entire firm's resources to the maximum benefit of our clients. More information on Wilshire can be found at www.wilshire.com.

About Wilmington Trust
Wilmington Trust, N.A. provides corporate and institution services including institutional trustee, retirement plan, agency, asset management, and administrative services for clients worldwide who use capital markets financing structures. Wilmington Trust provides directed trustee, custody, and fiduciary services for retirement plans, companies, foundations, organizations, and financial institutions. Wilmington Trust also provides Wealth Advisory services with a wide array of personal trust, financial planning, fiduciary, asset management, and family office solutions designed to help high-net-worth individuals and families grow, preserve and transfer wealth. Wilmington Trust maintains offices throughout the United States and internationally in London, Paris, Dublin, and Frankfurt. For more information, visit www.WilmingtonTrust.com.

*Guarantees are subject to the claims-paying ability of the issuing companies. The income guarantee is based on the income base at age 65, which is set to the greater of the market value or total contributions (less withdrawals) to date. The market value of the account is never guaranteed and fluctuates based on investment performance. While the market value of the account can be withdrawn at any time without any fees or penalties, doing so will cause the loss of the income guarantee.

American Century Investments® provides underlying sub-asset class and target date glide path management as well as marketing support for Income America.

¹ Consumer Opinions on In-Plan Guaranteed Income Investment Options, Lincoln Financial COVID-19 Sentiment Tracking Study, September 2020
² Lincoln Financial & CivicScience Protection Survey. Data gathered by CivicScience: 6/18/2020 – 6/25/2020

SOURCE American Century Investments