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State Street, Annexus Unveil TDF Series with Lifetime Income Option

Target Date Funds

State Street Global Advisors in partnership with Annexus Retirement Solutions and the Global Trust Company announced the launch of the State Street GTC Retirement Income Builder Series.

This target date series combines State Street Global Advisors' asset management expertise with Annexus Retirement Solutions' patent-pending lifetime income innovation to help Americans become more retirement-ready.

According to the announcement, the Series embeds Annexus Retirement Solutions’ Lifetime Income Builder, directly within the target date fund's glidepath as a separate asset class; this helps promote growth opportunity and permits liquidity and portability, pre- and post-income activation.

The solution also helps to mitigate sequence of return risk and longevity risk by capturing quarterly high-water marks on the full account value and providing lifetime income, the announcement further explains. The fund targets a 6% annual income rate at income activation, calculated using the highest captured high-water mark of the fund.

“With the Series being offered as a low-cost fund, Americans can invest more of their hard-earned dollars,” stated Bob McGowan, managing director and head of the Financial Institutions Group at State Street Global Advisors. “Even a small difference in fees can mean a big difference over the life of an investment, and a higher accumulated value often translates to greater income in retirement.”

“The industry has been stuck in a stale way of thinking, and many of today's income products require participants to trade off growth opportunity or access to funds in return for lifetime income,” said Dave Paulsen, chief distribution officer at Annexus Retirement Solutions. “We designed our solution to ensure that participants no longer need to make sacrifices in exchange for lifetime income. This level of innovation puts the participants at the center and is why we believe they will welcome—and widely adopt—this solution,” he added.

At product launch, the insurer line-up consists of Nationwide and Athene, but according to the announcement, there are additional insurers currently in the process of joining the Series. GTC is serving as the fiduciary and trustee of the investment vehicle. In addition, the Series will be available across multiple recordkeeping platforms.

Annexus Retirement Solutions had previously announced in March 2022 that it had joined forces with State Street to develop a TDF with an embedded income solution for the DC plan marketplace. The firm also announced an actively managed solution last year in partnership with Nationwide and Capital Group.