State Street Global Advisors and the University of California Innovate on Retirement Income Strategy With Launch to Participants

  • IncomeWise helps defined contribution savers balance financial flexibility and security in retirement

State Street Global Advisors (State Street), the asset management business of State Street Corporation, in partnership with the University of California (UC), announced that IncomeWise, a deferred lifetime income solution, has launched within the University of California’s defined contribution (DC) plans that serve more than 300,000 participants and include over $34.6 billion in assets.1

“We are excited by the opportunity IncomeWise™ offers retirees at UC and elsewhere,” said David Ireland, global head of defined contribution at State Street Global Advisors.

IncomeWise is a next generation solution that blends the flexibility and simplicity of traditional target date funds with the security of guaranteed lifetime income.2 Available for defined contribution plans, this solution represents a multi-year, cross-industry development, resulting in a new kind of retirement income strategy.

The enhancement, known as Deferred Lifetime Income at UC, was introduced to the university’s target date fund, Pathway, in August 2021.

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“The University of California has been researching how best to evolve our Retirement Savings Program to help participants save during their working years and live long comfortable lives in retirement,” said University of California Chief Investment Officer Jagdeep Singh Bachher. “People are living longer, with smaller pensions due to shorter job tenures. Given market volatility, there’s now a strong need for a supplemental source of guaranteed income in the later years of life. Deferred Lifetime Income is an innovative solution and an important step toward improving retirement security for our participants.”

Leveraging insights gleaned from State Street’s 25-plus years of managing target date strategies, IncomeWise focuses on providing a simple investment option to support participants through all their retirement years. The solution uses State Street’s target date glidepath to help participants accumulate wealth during their savings years. A portion of these savings can then be converted into a guaranteed income stream for later years of retirement by purchasing a qualified longevity annuity contract (QLAC). This approach offers participants income security when they are likely to need it most, while providing flexibility and access to savings during their early retirement years.

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“We are proud to partner with the University of California on its journey to improve retirement security, and also to work across the industry to build the framework that will further empower participants and plans in managing the retirement transition,” said David Ireland, global head of defined contribution at State Street Global Advisors. “We are excited by the opportunity IncomeWise™ offers retirees at UC and elsewhere.”

The launch at UC reflects collaboration and innovation with a leading plan sponsor, record keeper and insurance provider. State Street has worked in partnership with Fidelity to implement Deferred Lifetime Income as a custom solution on behalf of the University of California. Additionally, State Street conducted a thorough vetting process of insurance providers, culminating in the selection of Metropolitan Tower Life Insurance Company (“MetLife”) as the annuity provider for the 2021 annuitization.

“A predictable and lasting source of retirement income should be the outcome of any qualified retirement plan, ensuring that retirees have a solid foundation for their future,” said Graham Cox, MetLife’s executive vice president and head of Retirement & Income Solutions. “MetLife has been a leader and innovator in the retirement income space for more than 40 years and we are happy to be working with State Street to bring this unique solution to market for UC Retirement Savings Program participants.”

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