New target date fund series designed to help plan participants optimize accumulation during their working years and maximize lifetime income in retirement
COLUMBUS, Ohio – Leading insurance and financial services provider Nationwide, in partnership with Capital Group, home of American Funds, today announced the NCIT American Funds Lifetime Income Builder Target Date Series (The TDF Series). Packaged as a new generation target date fund, it incorporates Lifetime Income Builder, a fixed indexed annuity with a guaranteed lifetime withdrawal benefit invented by Annexus Retirement Solutions that adds to Nationwide’s suite of in-plan guarantees. The TDF Series will be available as an investment option in defined contribution plans and is designed to help participants optimize growth potential, and when the time comes, generate guaranteed income that will last a lifetime.
The TDF Series is financially engineered to deliver a total income of 6% at the projected retirement start date. It leverages several of American Funds’ proprietary funds, distinctive investment management, and 90-year history of helping investors secure their financial futures. The underlying mutual funds are actively managed for growth and/or income opportunity by 64 portfolio managers who average 25 years of experience.
“Our product development philosophy is centered on the participant, and this latest offering rounds out our suite of in-plan guarantee solutions which are all designed to help generate lifetime income,” said Eric Stevenson, president of Nationwide Retirement Solutions. “Our partnership with industry leaders Capital Group and Annexus Retirement Solutions reinforces our commitment to helping build secure financial futures by providing participants an income solution that supports them not only up to – but all the way through – retirement.”
“Lifetime Income Builder will leverage the proven building blocks of the American Funds, combined with Nationwide’s glidepath and lifetime income experience to provide participants with an effective source of retirement income, particularly in this low yield environment,” said Brendan Mahoney, head of Institutional Retirement Strategic Growth at Capital Group.
Inside The TDF Series
The TDF Series turnkey solution offers plan participants a familiar and growth-focused TDF investing experience, including risk-mitigating protection and income guarantees designed to maximize and deliver lifetime income. For plan sponsors, it provides a QDIA-compliant structure and a combination of liquidity, portability and ease of use that has been largely missing from previous in-plan income solutions.
The TDF Series is structured as a Collective Investment Trust and includes Lifetime Income Builder, a group fixed indexed annuity (FIA) with a guaranteed lifetime withdrawal benefit (GLWB). This structure enables participants to participate in the market during accumulation awhile protecting their future targeted income in retirement. The TDF Series is set to launch this fall.
“Built-in income guarantees prevent the possibility that participants will outlive their money,” said Dave Paulsen, chief distribution officer for Annexus Retirement Solutions. “A lock-in feature applies protection guarantees to remove sequence of returns risk. But the real game-changer is its ability to provide a daily valuation of the fixed indexed annuity. Our patent-pending innovation embeds Lifetime Income Builder within a target date fund enabling participants to purchase a fund with a fixed index annuity on a daily basis. This allows participants to maintain complete control over their savings by providing full liquidity of assets for the life of the product.”
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; and pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow the firm on Facebook and Twitter.
About Capital Group
Celebrating its 90th anniversary in 2021, Capital Group, home of American Funds, has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. As of June 30, 2021, Capital Group manages more than $2.6 trillion in equity and fixed income assets for millions of individuals and institutional investors around the world.
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.
For more information, visit capitalgroup.com.
American Funds Distributors, Inc.
About Annexus Retirement Solutions
Annexus Retirement Solutions designs products that help working Americans secure their financial futures leading up to, and all the way through, retirement. These solutions are financially engineered to provide defined contribution plan participants a seamless approach to optimize savings, help maximize a source of lifetime income, and protect against the biggest challenge in retirement – outliving their income. Annexus Retirement Solutions is backed by Annexus, the leading independent developer of insured wealth management solutions. In 2019, Blackstone made a strategic investment in Annexus, acquiring a minority stake in the company.
 The number of portfolio managers for the underlying funds in the investment are as of the most recent prospectus available dated September 1, 2021. Any manager serving on multiple underlying funds was counted once. Year of experience as of December 31, 2020. Managers and underlying funds may change.