Vanguard to Transition Administration of Variable Annuity Offering to Transamerica

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Jun 19, 2019, 16:30 ET

VALLEY FORGE, Pa., June 19, 2019 /PRNewswire/ -- Vanguard today announced plans to transition the client service and account administration for the Vanguard Variable Annuity to Transamerica within the next 12 to 18 months.

The Vanguard Variable Annuity contracts will continue to be guaranteed by the Transamerica Premier Life Insurance Company and, in New York State only, by Transamerica Financial Life Insurance Company. Vanguard will continue to manage the Vanguard Variable Insurance Funds, which are the underlying investments in the Vanguard Variable Annuity.

"While insurance-based options can be an appropriate choice for some investors, annuity administration is not central to our long-term product and service plans. We're deepening our focus on our core priorities: delivering industry-leading funds and ETFs, enhancing the client experience, and expanding our advice capabilities," said Karin Risi, Managing Director of Vanguard's Retail Investor Group, who noted that the company will work closely with Transamerica to ensure a seamless transition for current annuity holders.

"Transamerica is honored to have a relationship with Vanguard and its clients that spans close to 30 years. We look forward to working with Vanguard's expert team to transition recordkeeping for this annuity, which has been a valuable addition to many investors' portfolios," said Joe Boan, Senior Managing Director for Transamerica's Individual Solutions business. "We share a mutual goal to make this a smooth transition. Transamerica is deeply committed to helping families plan for a lifetime of financial security," Mr. Boan added.

Vanguard will also discontinue Vanguard Annuity Access^®, an online platform that enables individuals to compare income annuities from leading insurance companies. Vanguard will continue to have a relationship with Hueler Investment Services, Inc. to make Income Solutions^® available for defined contribution plan participants seeking an annuity. In addition, Vanguard will support any retail clients currently in the process of buying an annuity through the completion of the purchase. Clients who previously purchased annuities through the platform will continue to be served by their existing contract provider.

Focusing on core offerings

Vanguard's focus on its core offerings includes lowering costs of existing products, introducing new funds and ETFs, and enhancing existing services, including the following initiatives:

Continuing to drive down costs and returning value to clients. Last summer, Vanguard reduced the cost of ETF ownership by eliminating commissions on about 1,800 ETFs.¹ To broaden investor access to low-cost Admiral Shares, in November Vanguard lowered the account minimums for 38 index funds, delivering an estimated $71 million in aggregate savings to clients.²
Introducing innovative products and expanding its global lineup to meet investor needs and preferences. In November, Vanguard introduced Vanguard Global Credit Bond Fund to provide investors low-cost, diversified exposure to U.S. and international investment-grade credit markets. The actively managed Vanguard Global ESG Select Stock Fund launched in May, complementing two ESG ETFs added to the product roster in September.
Helping existing retail clients with guidance and advice, as well as plans to provide its advisor clients with turn-key advice technology solutions. For example, Vanguard recently enhanced its industry-leading Personal Advisor Services with a proprietary Health Care Cost Estimator Tool that forecasts a client's estimated annual health care expenses and lifetime long-term care costs.

At the same time and after careful consideration, Vanguard has eliminated several products and services this year. In January, Vanguard banned the purchase of inverse and leveraged funds from its brokerage platform after deeming that these highly speculative ETFs were incompatible with the firm's long-standing buy-and-hold approach. In February, the company announced the closing of the VanguardAdvantage account due to low adoption and usage. In March, Vanguard Convertible Securities Fund was liquidated after Vanguard determined that similar exposure and results could be achieved via a diversified, balanced portfolio of stocks and bonds.

About Vanguard
Vanguard is one of the world's largest investment management companies. As of April 30, 2019, Vanguard managed $5.6 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 414 funds to its more than 20 million investors worldwide. For more information, visit vanguard.com.

¹ Commission-free trading of Vanguard ETFs applies to trades placed both online and by phone. Commission-free trading of non-Vanguard ETFs applies only to trades placed online; most clients will pay a commission to buy or sell non-Vanguard ETFs by phone. It also excludes leveraged and inverse ETFs, which can't be purchased through Vanguard but can be sold with a commission. Commission-free trading of non-Vanguard ETFs also excludes 401(k) participants using the Self-Directed Brokerage Option; see your plan's current commission schedule. Vanguard Brokerage reserves the right to change the non-Vanguard ETFs included in these offers at any time. All ETFs are subject to management fees and expenses; refer to each ETF's prospectus for more information. Account service fees may also apply. All ETF sales are subject to a securities transaction fee. See the Vanguard Brokerage Services commission and fee schedules for full details.

² Estimated savings for the identified funds is the difference between prior and current expense ratios multiplied by eligible average AUM. Eligible average AUM is based on the daily average assets over the last 12-months (November 2017 to October 2018).

For more information about Vanguard funds and ETFs, visit vanguard.com or call 800-662-7447 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.

You must buy and sell Vanguard ETF Shares through Vanguard Brokerage Services (we offer them commission-free) or through another broker (which may charge commissions). See the Vanguard Brokerage Services commission and fee schedules for limits. Vanguard ETF Shares are not redeemable directly with the issuing fund other than in very large aggregations worth millions of dollars. ETFs are subject to market volatility. When buying or selling an ETF, you will pay or receive the current market price, which may be more or less than net asset value.

Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company. All investing is subject to risk, including the possible loss of the money you invest. Investments in bonds are subject to interest rate, credit, and inflation risk. Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.

The Vanguard Variable Annuity is a flexible-premium variable annuity issued by Transamerica Premier Life Insurance Company, Cedar Rapids, Iowa (NAIC No. 66281), and in New York State only, by Transamerica Financial Life Insurance Company, Harrison, New York (NAIC No. 70688). Form No. VVAP U 1101 (in Florida, Form No. VVAP U 1101 (FL), in Oregon, Form No. VVAP U 1101 (OR) (R), VVA ME 0508 (OR 2015), and in New York, VVA NY 0208(R13)). GLWB Rider Form No. RGMB 43 0811 (in Florida, RGMB 43 0811 (SI)(FL), RGMB 43 0811 (JT)(FL), in Oregon, RGMB 43 0811 (SI)(OR), RGMB 43 0811 (JT)(OR), and in New York, RGMB 43 0811 (SI)(NY) (REV), RGMB 43 0811 (JT)(NY) (REV)). Return of Premium Death Benefit Rider Form No. VVA RP 0811 (in Florida, VVA RP 0811 (FL), in Oregon, VVA RP 0811 (OR), and in New York, VVA RP 0811 (NY) (REV)), without agent representation. Policy and rider form numbers may vary by state and may not be available in all states. The Vanguard Group administers the Vanguard Variable Annuity for the issuer.

Vanguard's income annuities are offered in collaboration with Hueler Investment Services, Inc. through the Income Solutions platform. Income Solutions is a registered trademark of Hueler Investment Services, Inc. and used under license. United States Patent No. 7,653,560. Vanguard Annuity Access is provided by Vanguard Marketing Corporation, d/b/a VMC Insurance Services in California.

Vanguard Marketing Corporation, Distributor of the Vanguard Funds.

U.S. Patent Nos. 6,879,964; 7,337,138; 7,720,749; 7,925,573; 8,090,646; and 8,417,623.

SOURCE Vanguard