TIAA’s RetirePlus In-Plan Income Option Reaches $30B

TIAA’s default workplace retirement plan solution providing participants access to a guaranteed-interest annuity has grown from $10 billion to $30 billion in assets in about two years, the firm announced Wednesday.

TIAA’s RetirePlus is now being used by more than 400,000 participants across 500 institutional clients, up from 250,000 participants as of 24 months ago, according to the retirement income provider and recordkeeper. The New York-based firm attributes the growth to demand for a default solution that offers a pension-like income option for participants.

TIAA has a long history of providing annuity-backed retirement income products to participants when it started doing so for 403(b) plans about 100 years ago. It introduced a custom default product for defined contribution plans generally in 2014, and then launched RetirePlus in 2018, according to company statements.

“TIAA fundamentally believes that all retirement plans in the U.S. should offer participants the option to have a monthly retirement paycheck as long as they live,” said Colbert Narcisse, chief product and business development officer at TIAA, in a statement. “RetirePlus is one of the vehicles to provide this retirement paycheck by offering guaranteed income in retirement and guaranteed growth during accumulation – all at a potentially lower plan cost.”

Narcisse announced earlier this month an expanded leadership role to oversee TIAA’s institutional lifetime income team. Christopher Stickrod was named executive vice president and product general manager for institutional managed solutions; he had previously been with TIAA’s Nuveen asset management division.

TIAA’s RetirePlus can be offered as a qualified default investment alternative that puts participants into an investment portfolio including its TIAA Traditional annuity, which then allows participants to convert some or all their savings into a “personal pension” in retirement.

Through the offering, plan sponsors can “create built-in guarantees during asset accumulation and distribution, reduce default option costs, tailor default options based on its participant’s demographics, and allow participants to create guaranteed lifetime income in retirement,” according to TIAA.

New Retirement Income Training

Meanwhile, if retirement advisers want to learn more about offering retirement income to plan sponsor clients, they can now get a certificate set up by the National Association of Plan Advisors.

The DC-based association announced the Retirement Income for 401(k) Plans Certificate program on Wednesday designed for advisers to “evaluate, explain and implement retirement income solutions for clients.”

The program is being offered in five interactive modules for advisers to take on their own schedule and is free for NAPA members due to sponsoring that include TIAA’s Nuveen, AllianceBernstein, Allianz, Income America, PGIM, and more.

“401(k) plans are tremendously successful workplace savings programs, but they are not yet truly retirement plans,” said Brian Graff, CEO of the American Retirement Association and executive director of NAPA, in a statement. “Retirement income solutions have the promise of addressing this gap, enabling participants to receive income in retirement from plan investments.”

A recent survey by Greenwald Research noted that many plan sponsors are hesitant to offer participants retirement income options due to the “three Cs” of complexity, cost, and choice. The firm reported that 59% of plan sponsors view in-plan income as “too complex”; the surveying included 503 companies with at least 50 employees.