Capital Group Piloting Benartzi’s PensionPlus Retirement Income Manager

The Capital Group Companies Inc., which runs American Funds, is partnering with Shlomo Benartzi’s PensionPlus on a pilot program to offer target-date-fund participants the chance to use a personalized retirement paycheck distribution tool, the firms announced Monday.

Billed as a complement to American Funds’ TDF retirement series, PensionPlus will take into account participant needs and goals to manage retirement saving distributions in retirement, at no cost to the TDF holder. American Funds is the third-largest TDF provider, according to data from ISS Market Intelligence’s Simfund, which, like PLANADVISER, is owned by Institutional Shareholder Services Inc.

“PensionPlus democratizes retirement income planning for all participants,” Benartzi, co-founder of PensionPlus and a professor emeritus of the behavioral decision-making group at the UCLA Anderson School of Management, said in a statement.

With Benartzi’s system, participants can answer questions in “about 10 minutes” to create a “customized and sustainable retirement paycheck that reflects their needs, goals and preferences,” he said.

After the retiree begins receiving distributions, PensionPlus will then monitor the plan, adjusting for inflation and providing nudges to stay on track. “Our simple goal is to give retirees the peace of mind they deserve with a paycheck they can count on,” Benartzi said.

The partnership with Capital Group adds to a pilot program with OneAmerica that PenionPlus started earlier this year. That partnership provides the retirement income management tool to OneAmerica plan sponsors and their participants.

Capital Group signed onto the partnership to meet the income investment manager’s long-term goal of expanding coverage of workplace retirement plans while creating better outcomes for participants, according to Brendan Mahoney, Capital Group’s head of institutional retirement strategic growth.

“We look forward to implementing the service to help advisers scale their business and work with their plan sponsor clients to support participants in achieving their retirement goals,” Mahoney said in a statement.

The companies noted in the announcement that PensionPlus takes into account personal differences in retirement planning and needs. The companies noted that some retirees want to travel, others want to set aside funds for long-term care and some take Social Security distributions at different times, which can change the distribution amount. The tool is designed to take “these differences into account, while also ensuring that participants remain in complete control of their assets.”