Pacific Life and Franklin Templeton Announce Defined Contribution Lifetime Income Solution
Pacific Life and Franklin Templeton have announced a strategic partnership to deliver a defined contribution lifetime income solution for retirement plans. This collaboration combines Pacific Life's Income Horizon™ with Franklin Templeton's Goals Optimization Engine (GOE®) to offer a personalized income approach within Collective Investment Trusts (CITs).
The solution allows plan participants to convert part of their retirement savings into a guaranteed income stream for life within their existing plan. It addresses key concerns highlighted in recent studies, including the preference for incremental lifetime income purchases over time. The framework integrates participant data and machine learning to provide personalized recommendations, offering advantages such as competitive pricing, fiduciary oversight, and portability.
Pacific Life e Franklin Templeton hanno annunciato una partnership strategica per offrire una soluzione di reddito per la vita a contribuzione definita per i piani di pensionamento. Questa collaborazione combina l'Income Horizon™ di Pacific Life con il Goals Optimization Engine (GOE®) di Franklin Templeton per fornire un approccio al reddito personalizzato all'interno dei Collective Investment Trusts (CIT).
La soluzione consente ai partecipanti al piano di convertire una parte dei propri risparmi per la pensione in un flusso di reddito garantito per tutta la vita all'interno del piano esistente. Affronta preoccupazioni chiave evidenziate in recenti studi, inclusa la preferenza per l'acquisto incrementale di redditi durante la vita. Il framework integra i dati dei partecipanti e l'apprendimento automatico per fornire raccomandazioni personalizzate, offrendo vantaggi come prezzi competitivi, supervisione fiduciaria e portabilità.
Pacific Life y Franklin Templeton han anunciado una asociación estratégica para ofrecer una solución de ingresos vitalicios por contribución definida para planes de jubilación. Esta colaboración combina el Income Horizon™ de Pacific Life con el Goals Optimization Engine (GOE®) de Franklin Templeton para ofrecer un enfoque de ingresos personalizado dentro de los Collective Investment Trusts (CIT).
La solución permite a los participantes del plan convertir parte de sus ahorros para la jubilación en un flujo de ingresos garantizado de por vida dentro de su plan existente. Aborda preocupaciones clave destacadas en estudios recientes, incluyendo la preferencia por compras incrementales de ingresos vitalicios a lo largo del tiempo. El marco integra datos de los participantes y aprendizaje automático para proporcionar recomendaciones personalizadas, ofreciendo ventajas como precios competitivos, supervisión fiduciaria y portabilidad.
퍼시픽 라이프와 프랭클린 템플턴은 은퇴 계획을 위한 정의된 기여 평생 소득 솔루션을 제공하기 위한 전략적 파트너십을 발표했습니다. 이 협력은 퍼시픽 라이프의 Income Horizon™과 프랭클린 템플턴의 Goals Optimization Engine (GOE®)을 결합하여 Collective Investment Trusts (CITs) 내에서 개인화된 소득 접근 방식을 제공합니다.
이 솔루션은 계획 참여자들이 기존 계획 내에서 은퇴 저축의 일부를 평생 보장된 소득 흐름으로 전환할 수 있도록 합니다. 최근 연구에서 강조된 주요 우려 사항, 즉 시간이 지남에 따라 점진적인 평생 소득 구매에 대한 선호를 다룹니다. 프레임워크는 참여자 데이터를 통합하고 기계 학습을 통해 개인화된 추천을 제공하며, 경쟁력 있는 가격 책정, 수탁자 감독, 휴대성 등의 장점을 제공합니다.
Pacific Life et Franklin Templeton ont annoncé un partenariat stratégique pour offrir une solution de revenu à vie à contribution définie pour les plans de retraite. Cette collaboration combine l'Income Horizon™ de Pacific Life avec le Goals Optimization Engine (GOE®) de Franklin Templeton pour offrir une approche de revenu personnalisée au sein des Collective Investment Trusts (CIT).
La solution permet aux participants du plan de convertir une partie de leurs économies de retraite en un flux de revenu garanti à vie dans leur plan existant. Elle répond aux préoccupations clés mises en évidence dans des études récentes, y compris la préférence pour des achats de revenu à vie incrémentaux au fil du temps. Le cadre intègre les données des participants et l'apprentissage automatique pour fournir des recommandations personnalisées, offrant des avantages tels que des prix compétitifs, une surveillance fiduciaire et une portabilité.
Pacific Life und Franklin Templeton haben eine strategische Partnerschaft angekündigt, um eine laufende Einkommenslösung auf definierter Beitragsbasis für Altersvorsorgepläne bereitzustellen. Diese Zusammenarbeit kombiniert die Income Horizon™ von Pacific Life mit der Goals Optimization Engine (GOE®) von Franklin Templeton, um einen personalisierbaren Einkommensansatz innerhalb von Collective Investment Trusts (CITs) anzubieten.
Die Lösung ermöglicht es den Teilnehmern, einen Teil ihrer Altersvorsorge in einen lebenslangen garantierten Einkommensstrom innerhalb ihres bestehenden Plans umzuwandeln. Sie spricht wichtige Anliegen an, die in aktuellen Studien hervorgehoben wurden, einschließlich der Präferenz für schrittweise Einkäufe lebenslangen Einkommens im Laufe der Zeit. Der Rahmen integriert Teilnehmerdaten und maschinelles Lernen, um personalisierte Empfehlungen zu geben, und bietet Vorteile wie wettbewerbsfähige Preisgestaltung, treuhänderische Aufsicht und Portabilität.
- Strategic partnership between Pacific Life and Franklin Templeton to offer innovative retirement income solution
- Personalized approach to lifetime income within defined contribution plans
- Addresses participant preference for incremental lifetime income purchases
- Utilizes machine learning and participant data for tailored recommendations
- Provides competitive group pricing, fiduciary oversight, and portability for participants
- None.
Insights
As a financial analyst, I find this partnership between Pacific Life and Franklin Templeton to be a significant development in the defined contribution (DC) retirement plan landscape. The collaboration addresses a important gap in the market: providing guaranteed lifetime income within DC plans.
Key points to consider:
- Market Demand: The 87% of U.S. workers expressing interest in guaranteed lifetime income streams indicates a substantial market opportunity.
- Innovative Solution: The combination of Pacific Life's Income Horizon™ and Franklin Templeton's Goals Optimization Engine (GOE®) offers a personalized approach to retirement income, which is a step beyond traditional one-size-fits-all models.
- Competitive Advantage: By offering this solution within DC plans, participants benefit from group pricing, fiduciary oversight and portability, which could give these firms an edge in the highly competitive retirement services market.
- Potential Revenue Growth: This partnership could lead to increased assets under management for both companies, as well as new revenue streams from the lifetime income products.
While the financial impact remains to be seen, this move positions both Pacific Life and Franklin Templeton at the forefront of addressing a growing concern in retirement planning. The success of this venture could potentially influence industry trends and regulatory discussions around retirement income solutions in DC plans.
This collaboration between Pacific Life and Franklin Templeton marks a significant shift in the retirement planning landscape. Here's why it matters:
- Personalization at Scale: The integration of machine learning and participant data to create personalized retirement income plans addresses the diverse needs of an aging workforce.
- Flexibility in Income Purchases: The preference for incremental lifetime income purchases (58% of respondents) aligns with modern retirement planning theories that advocate for a more dynamic approach to securing income.
- Simplified Implementation: By structuring the solution within Collective Investment Trusts (CITs), the partners are making it easier for plan sponsors to adopt and implement these strategies.
- Holistic Decumulation Strategy: This approach combines asset allocation advice with guaranteed income, addressing both the accumulation and decumulation phases of retirement planning.
The potential impact on retirees' financial security could be substantial. By providing a framework for converting savings into lifetime income within the familiar DC plan structure, this solution may help mitigate the risk of retirees outliving their assets. However, the success of this initiative will depend on factors such as the pricing of the guaranteed income component, the effectiveness of the personalization algorithms and the willingness of plan sponsors to adopt the solution.
From a market research perspective, this partnership between Pacific Life and Franklin Templeton is tapping into a significant unmet need in the retirement planning sector. Let's break down the key market insights:
- Consumer Demand: The 87% of workers interested in guaranteed lifetime income streams represents a vast potential market. This high percentage suggests a shift in consumer preferences towards more secure retirement options.
- Product-Market Fit: The solution's design, allowing for incremental purchases over time, aligns with the 58% of respondents who prefer this approach. This indicates a strong product-market fit.
- Market Differentiation: The personalized approach using advanced data analytics and machine learning sets this offering apart in a market often criticized for its one-size-fits-all solutions.
- Target Market Evolution: By addressing the needs of participants with varying characteristics (tenure, balances, savings rates, etc.), the solution caters to an increasingly diverse workforce approaching retirement.
The market potential for this type of solution is substantial, given the aging population and the shift from defined benefit to defined contribution plans. However, success will depend on effective marketing and education to both plan sponsors and participants. The complexity of the solution may require significant efforts to communicate its benefits clearly. Additionally, monitoring adoption rates and participant engagement will be important for refining the offering and ensuring long-term market success.
Together, the two firms are evolving the way lifetime income is delivered in defined contribution plans, by bringing together Pacific Life's Income Horizon™ and Franklin Templeton's Goals Optimization Engine (GOE®) to form a unique personalized income approach structured within Collective Investment Trusts (CITs) for simplified implementation. The resulting lifetime income framework allows defined contribution plan participants to seamlessly convert a portion of their accumulated retirement savings into a guaranteed income stream for life, right inside their existing plan. The solution combines personalized asset allocation advice provided by Franklin Templeton that includes allocations to lifetime income secured by Pacific Life to extend into a complete decumulation strategy.
“This partnership underscores a shared commitment to retirement income security, with a focus on innovation and customization to meet the evolving needs of plan sponsors and their participants,” said Brian Woolfolk, executive vice president and head of institutional business at Pacific Life. “Our collaborative approach addresses a number of key concerns that participants have expressed in research studies.”
Pacific Life recently released Decoding Retirement, a study highlighting a variety of factors influencing retirement outcomes for participants. Notably, 58 percent of respondents preferred incremental lifetime income purchases over time versus a larger purchase at retirement. “The design of Income Horizon aligns with this preference for incremental purchases over time. And, when integrated with GOE, creates a simple, holistic, and personalized approach to securing lifetime income in retirement for plan participants. This innovative solution built with Franklin Templeton is a significant advancement over the traditional one-size-fits-all approach,” added Woolfolk.
Plan participants approaching retirement have a widely divergent set of relevant characteristics, such as varying tenures, balances, savings rates, continued usage of target-date funds, access to traditional pension plans, marital status, desired retirement ages and preferences regarding spending in retirement.
“The new framework that Franklin Templeton and Pacific Life have collaborated to develop addresses these crucial differences and integrates the broad array of participant data that plan sponsors have access to—building on modern approaches to data and machine learning—to personalize recommendations,” said Yaqub Ahmed, co-head of retirement, insurance, and 529 distribution at Franklin Templeton.
By accessing a guaranteed income solution within a defined contribution plan, participants benefit from a number of crucial advantages, including competitive group/scale pricing, fiduciary oversight, professional management, dollar-cost averaging, and portability.
For plan sponsors, this holistic solution helps address key considerations, such as scaled costs and ease of implementation. Once a plan sponsor adopts the solution, there is an efficient path to making it available to plan participants to secure a personalized retirement income plan to meet their future needs.
“We believe every
Pacific Life’s deep experience in pension risk transfer and retirement income, and Franklin Templeton’s 75+ year history of asset management, bring together financial strength and stability. Their collaboration aims to address existing gaps in the market with a personalized, simple, and flexible approach to asset allocation, insured income, and participant engagement.
For more information, please contact: Michael Oler at Michael.Oler@PacificLife.com or Ahmet Kamil at Ahmet.Kamil@PacificLife.com.
About Pacific Life:
Pacific Life provides a variety of products and services designed to help individuals and businesses in the retail, institutional, workforce benefits, and reinsurance markets achieve financial security. Whether your goal is to protect loved ones or grow your assets for retirement, Pacific Life offers innovative life insurance and annuity solutions, as well as mutual funds, that provide value and financial security for current and future generations. Supporting our policyholders for more than 150 years, Pacific Life is a Fortune 500 company headquartered in
Pacific Life’s Income Horizon™ is a group deferred income annuity. Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products can be issued in all states, except
All guarantees are subject to the claims-paying ability and financial strength of the issuing insurance company.
About Franklin Templeton:
Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the
Franklin Templeton’s Goals Optimization Engine (GOE®) recommends a portfolio for each goal an investor has, actively adjusts the asset mix over time, seeking to maximize the likelihood of achieving retirement goals. There can be no guarantee goals will be achieved. Investment allocation generated by GOE® is based on information provided and may be limited to the investment options available in the defined contribution plan. GOE® is owned and managed by Franklin Advisers, Inc.
©2024 Franklin Distributors, LLC.
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Pacific Life
Jesse Page
(949) 219-4575
jpage@pacificlife.com
Franklin Templeton
Rebecca Radosevich
(212) 632-3207
rebecca.radosevich@franklintempleton.com
Source: Pacific Life
FAQ
What is the new retirement solution offered by Pacific Life and Franklin Templeton?
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What percentage of U.S. workers want access to guaranteed lifetime income as an employment benefit?
How does the Pacific Life and Franklin Templeton solution address participant preferences?
