The latest entrant into the retirement income space comes in the form of a new target-date fund.
Nuveen, the investment manager of TIAA, has just introduced the Nuveen Lifecycle Income Series, a target date solution for defined contribution plans that it says offers plan participants guaranteed savings growth during their working years and the ability to set aside a portion of savings for guaranteed monthly payments that last for life in retirement.
An extension of the Nuveen Lifecycle target date fund platform, the new series is structured as a collective investment trust (CIT) with an embedded TIAA Secure Income Account (SIA), a deferred fixed annuity within a familiar target date fund (TDF) series. The series includes three TDF strategies:
- Nuveen Lifecycle Income Index (all passive investments);
- Nuveen Lifecycle Income Blend (a blend of active and passive investments); and
- Nuveen Lifecycle Income Active (all active investments).
The trustee for the new CITs is SEI Trust Company, which has the ultimate fiduciary authority over the management of and investments made in the CIT, with Nuveen serving as advisor.
According to a press release, the Nuveen Lifecycle Income CITs include allocations to guaranteed income throughout participants’ “glidepaths,” “potentially lowering overall portfolio volatility during their careers and throughout their retirements.”
Participants automatically build up optional lifetime income payments through their contributing years, and the longer they are invested, the greater their opportunity for additional guaranteed lifetime income in retirement thanks to SIA’s “loyalty bonus” profit-sharing feature.
Payments in retirement can also increase over time, helping to mitigate the effects of inflation, according to the firm. In addition, the TIAA SIA allocation within the CIT is protected from losing value and grows no matter what the market does. At retirement, a participant can—but is not required to—choose to turn some or all their savings in the TDF into a monthly “paycheck” for life.
Nuveen currently manages approximately $85 billion in target date assets.
