Mergers & Innovations

Transamerica Teams With State Street Global Advisors To Help More Americans Become Retirement Ready

The recordkeeping powerhouse joins a consortium of industry leaders to deliver lifetime income through innovative target date series

SCOTTSDALE, Ariz., Nov. 9, 2023 /PRNewswire/ — ARS (previously Annexus Retirement Solutions) announced today that Transamerica is adding the State Street GTC Retirement Income Builder (the Series) to its recordkeeping platform, joining State Street Global Advisors, Global Trust Company (GTC) and ARS in helping more Americans become retirement ready. This new industry innovation in target date funds provides lifetime income, while preserving growth opportunity and participant control of the assets.

Transamerica is dedicated to helping participants secure their financial futures and believes in-plan income solutions can be one of the most critical components to helping solve today’s retirement income crisis. It is estimated that half of U.S. retirees are at risk of being unable to maintain their pre-retirement standard of living, based on current savings levels.1 In addition to lack of savings, life expectancies are rising, and many investors do not have the expertise or guidance needed to create a plan to make their savings last throughout retirement.

“Transamerica is keenly focused on delivering solutions that can help participants better prepare for retirement,” said Phil Eckman, president of Transamerica Workplace Solutions. “By adding this target date series as an option for plan sponsors and their participants, we deliver a much-needed investment option that is designed to generate both growth and lifetime income, not one over the other.”

Working Together To Deliver New Solutions

The Series combines State Street Global Advisors’ cost-efficient asset management expertise, Transamerica Life Insurance Company’s industry leading stable value products with ARS’ patent-pending lifetime income solution, Lifetime Income Builder.2 The solution, which launched earlier this year, is embedded directly within the target date fund’s glidepath as a separate asset class, which helps promote growth opportunity and permits liquidity and portability. The Series is designed to be used as a qualified default investment alternative (QDIA).

“Transamerica has always had a progressive approach to delivering new solutions and is a natural partner to offer this investment,” said Dave Paulsen, chief distribution officer at ARS. “Historically, lifetime income solutions require a tradeoff of growth opportunity or liquidity, but we’ve removed those tradeoffs within this product design.”

By adding this target date series as an option for plan sponsors and their participants, we deliver a much-needed investment option that is designed to generate both growth and lifetime income, not one over the other...

One important component of the product design is the simplicity on the participant level. “We recognized that the industry was still asking participants to make decisions on solutions they didn’t understand,” said Paulsen. “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.”

The Series helps mitigate sequence of return risk by capturing quarterly high-water marks3 on the full account value and utilizing the Transamerica Stable Value offering for those near and in retirement—helping protect participants’ savings and providing lifetime income. The fund targets a 6% annual income rate4 at income activation, calculated using the highest captured high-water mark of the fund. The inclusion of Transamerica’s stable value product provides participants the benefit of a principally protected investment while reducing their total expected return volatility over time. Just like other target date funds, the investment does not require participant-level decisions, making it simple and easy for a participant to invest and to receive lifetime income.

“We have a strong relationship with Transamerica already and are thrilled to expand our partnership with this new solution, helping more Americans retire with lifetime income,” said Bob McGowan, managing director and head of the Financial Institutions Group at State Street Global Advisors.

Transamerica is the most recent top-rated recordkeeper to add the Series to its platform, and the investment will be available across multiple recordkeeping platforms in the coming months. Participants who choose to keep their assets in-plan and under Transamerica’s administration will gain greater long-term value by benefiting from institutional pricing all the way through retirement.

 

 

 

About Transamerica
With a history that dates back more than 100 years, Transamerica is a leading provider of life insurance, retirement, and investment solutions, serving millions of customers throughout the United States. Transamerica’s dedicated professionals focus on helping people live their best lives through saving, investing, and protecting their loved ones. Transamerica is dedicated to building America’s leading middle market life insurance and retirement company, with unique access to the large and growing middle market consumer via World Financial Group and US retirement recordkeeping. Transamerica provides a broad range of quality individual life insurance policies, workplace supplemental insurance benefits, workplace retirement plans, individual retirement accounts, and investment products including mutual funds, annuities, stable value solutions, as well as investment management services.
In 2022, Transamerica fulfilled its promises to customers, paying more than $46 billion in insurance, retirement, and annuity claims and benefits, including return of annuity premiums paid by the customer. Transamerica’s head office is in Baltimore, Maryland, with other major operations in Cedar Rapids, Iowa, and Denver, Colorado. Transamerica is part of the Aegon group of companies. Each Aegon company is solely responsible for its own financial conditions and contractual obligations. Based in the Netherlands, Aegon is an international financial services holding company.
About State Street Global Advisors
For four decades, State Street Global Advisors has served the world’s governments, institutions and financial advisors. With a rigorous, risk-aware approach built on research, analysis and market-tested experience, we build from a breadth of index and active strategies to create cost-effective solutions. And, as pioneers in index, ETF, and ESG investing, we are always inventing new ways to invest. As a result, we have become the world’s fourth-largest asset manager5 with US $3.8 trillion6 under our care.
About Global Trust Company
GTC (Global Trust Company, Inc.) is a State of Maine chartered non-depository trust company providing fiduciary and trustee services for some of the largest and most complex institutional asset managers and asset owners. Founded in 2008 as a subsidiary of Northeast Retirement Services (NRS), we currently manage, as of September 30, 2023, $103 billion across 80 trusts and over 300 funds. GTC is a leader in the design and implementation of proprietary collective investment trusts (CITs) and has demonstrated a continued willingness and ability to launch complex fund structures for the benefit of our partners and institutional investors. NRS and GTC are part of the BPAS Trust Services group, a wholly-owned subsidiary of Community Bank System, Inc. (CBS, NYSE: CBU).
About ARS
ARS (previously Annexus Retirement Solutions) designs, develops, and facilitates distribution of institutional lifetime income products that help Americans solve their biggest challenge in retirement—outliving their money. Founded in 2020 by the leaders of Annexus Group, the company’s over-arching philosophy centers on delivering better participant outcomes through innovation. It is led by industry veterans with a combined 175 years of experience in retirement plans, annuities, and asset management. ARS is headquartered in Scottsdale, Arizona. Learn more about ARS at www.annexusretirementsolutions.com.
1 Center for Retirement Research at Boston College, THE NATIONAL RETIREMENT RISK INDEX: AN UPDATE FROM THE 2019 SCF, January 2021.
2 Lifetime Income Builder is a group fixed indexed annuity with a guaranteed lifetime withdrawal benefit (a “FIA”). The withdrawal benefit is subject to the claims paying ability of the insurers and insurers do not guarantee that participants will receive lifetime income.
3 The value of the target date fund account is measured on the last business day of each calendar quarter and the last business day of the month prior to income activation, and then the highest measured value is locked in. The high-water mark is not measured until the fund begins to allocate to the fixed indexed annuity.
4 6% is a targeted percentage and there is no assurance that the funds will be able to make payments that meet the targeted percentage. Actual percentage may vary. See detailed disclaimers at the end of this press release regarding actual percentage.
5 Pensions & Investments Research Center, as of 12/31/22.
6 This figure is presented as of June 30, 2023 and includes approximately $63 billion USD of assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated. Please note all AUM is unaudited.