Nationwide, Capital Group and Annexus Retirement Solutions Set to Launch Next Evolution in Target Date Series
In response to the SECURE Act, these industry leaders have launched an innovative new target date fund series designed to help plan participants optimize accumulation during their working years and maximize lifetime income in retirement
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 experience1.
“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.
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.”
1 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.
This material is not a recommendation to buy or sell a financial product or to adopt an investment strategy. Investors should discuss their specific situation with their financial professional.
The Nationwide Collective Investment Trust (“NCIT”) is a bank-sponsored collective investment trust (“CIT”) and not a mutual fund. The NCIT is composed of individual collective funds including the NCIT American Funds Lifetime Income Builder Series (“Series”) of target date funds (“Funds”). Because the CIT is not registered with or required to file prospectuses or registration statements with the SEC or any other regulatory body, neither is available. Investors should consult the Offering Memorandum for the Series and carefully consider the investment objectives, risk, charges, and expenses of the Funds before investing. It is possible to lose money by investing in the CIT. Global Trust Company (“GTC”) is the CIT Trustee and maintains ultimate fiduciary authority over the management of, and investments made in, the CIT. The CIT is exempt from registration under the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended. Nationwide Fund Advisors (“NFA”) is the investment advisor to the Series.
Each Fund in the Series invests primarily in underlying funds and a group annuity contract issued by Nationwide Life Insurance Company (“Nationwide”), an affiliate of NFA. All contractual guarantees are backed solely by the claims paying ability of Nationwide. Capital Group manages the underlying American Funds, but the underlying funds and their allocations in the Investment are determined by NFA.
Nationwide, Capital Group, American Funds and Global Trust Company are separate and non-affiliated companies.
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