The annuity that the target-date funds invests in providers a guaranteed lifetime income stream while giving participants full access to their account balance at all times. The lifetime income may increase in good markets but will not decrease in poor markets.
The solution integrates guaranteed lifetime income into a multi-manager target-date funds, freeing plan sponsors from dependence on any single insurance company or investment manager.
“The 2008 financial crisis left many participants uncertain about their retirement security, and has underscored the need to provide lifetime income within defined contribution plans,” said Thomas J. Fontaine, head of defined contribution investments at AllianceBernstein. “Single-insurer products are available today, but based on our conversations with large plan sponsors, multiple insurers are a ‘must have’ for their guaranteed retirement income offerings. Our ‘Secure Retirement Strategies’ is specifically designed to meet the needs of plan fiduciaries who want to diversify the insurers providing their retirement income guarantee.”