State Street Global Advisors, Global Trust Company, and Annexus Retirement Solutions Launch Target Date Series That Aims to Deliver Lifetime Income

Rhea-AI Summary

Global Trust Company, State Street Global Advisors, and Annexus Retirement Solutions have launched the State Street GTC Retirement Income Builder Series, designed to enhance retirement readiness with a low-cost investment solution. This Series integrates Annexus's patent-pending Lifetime Income Builder within a target date fund's glidepath, addressing key retirement risks like sequence of return and longevity risk. With State Street managing nearly $136 billion in target date strategies and aiming for a 6% annual income rate at activation, the Series leverages strong partnerships with top-rated insurers like Nationwide and Athene to mitigate risks and promote growth. The participant-centric approach and low fees enhance accessibility for Americans preparing for retirement.

Positive

• Launch of a low-cost retirement solution targeting 6% annual income.
• Partnership with top insurers like Nationwide and Athene enhances reliability.
• Strong asset management backing with State Street's $136 billion in target date strategies.
• Innovative design addresses critical retirement risks effectively.

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• None.

This innovative, low-cost solution is helping redefine how the industry delivers in-plan income

SCOTTSDALE, Ariz., April 19, 2023 /PRNewswire/ -- Global Trust Company (GTC), along with State Street Global Advisors the world's fourth largest asset manager¹, and Annexus Retirement Solutions, a designer of institutional lifetime income products, announce the launch of the State Street GTC Retirement Income Builder Series (Series). This target date series combines State Street Global Advisors' cost-efficient asset management expertise with Annexus Retirement Solutions' patent-pending lifetime income innovation to help Americans become more retirement-ready. GTC is the fiduciary and trustee of the Series investment vehicle.

"With more than 40 years in the defined contribution space and nearly $136 billion under management in target date strategies, State Street is uniquely positioned to help people prepare for retirement with confidence," said Bob McGowan, managing director and head of the Financial Institutions Group at State Street Global Advisors. "With the Series being offered as a low-cost fund, Americans can invest more of their hard-earned dollars. Even a small difference in fees can mean a big difference over the life of an investment, and a higher accumulated value often translates to greater income in retirement."

The State Street GTC Retirement Income Builder Series embeds Annexus Retirement Solutions' innovative design, Lifetime Income Builder², directly within the target date fund's glidepath as a separate asset class. This helps promote growth opportunity and permits liquidity and portability, pre- and post-income activation. The participant-centric solution also helps to mitigate two of the most critical risks in retirement—sequence of return risk and longevity risk—by capturing quarterly high-water marks³ on the full account value and providing lifetime income. The fund targets a 6% annual income rate⁴ at income activation, calculated using the highest captured high-water mark of the fund.

"The industry has been stuck in a stale way of thinking, and many of today's income products require participants to trade off growth opportunity or access to funds in return for lifetime income," said Dave Paulsen, chief distribution officer at Annexus Retirement Solutions. "It is not enough to simply add lifetime income to an existing product or platform—participants won't accept it. We designed our solution to ensure that participants no longer need to make sacrifices in exchange for lifetime income. This level of innovation puts the participants at the center and is why we believe they will welcome—and widely adopt—this solution."

Lifetime Income Builder is backed by the strength and stability of some of the nation's top-rated insurance companies. At product launch, the insurer line-up consists of Nationwide and Athene; however, there are additional well-known insurers currently in the process of joining the Series. Having multiple carriers spreads the risk between the companies, which means the possibility of more competitive pricing and greater growth opportunities. Insurance contract guarantees are subject to the claims paying ability of each insurance company.

State Street Global Advisors will provide glidepath recommendations to the trustee, GTC, and manage a portion of the solution's underlying assets. Annexus Retirement Solutions is providing its Lifetime Income Builder design and the Annexus Retirement Data Exchange (ARDX), a proprietary middleware solution that streamlines data communication and administration. ARDX also enables faster, seamless fund implementation and processing capabilities for the recordkeeper and all other parties. GTC is the trustee, maintaining fiduciary authority over the management of, and investments made in, the State Street GTC Retirement Income Builder Series. The Series will be available across multiple recordkeeping platforms.

About Global Trust Company

GTC (Global Trust Company, Inc.) is a State of Maine chartered non-depository trust company providing fiduciary and trustee services for some of the largest and most complex institutional asset managers and asset owners. Founded in 2008 as a subsidiary of Northeast Retirement Services (NRS), we currently manage, as of Februrary 28, 2023, $94 billion across 80 trusts and over 300 funds. GTC is a leader in the design and implementation of proprietary collective investment trusts (CITs) and has demonstrated a continued willingness and ability to launch complex fund structures for the benefit of our partners and institutional investors. NRS and GTC are part of the BPAS Trust Services group, a wholly-owned subsidiary of Community Bank System, Inc. (CBS, NYSE: CBU).

About State Street Global Advisors

For four decades, State Street Global Advisors has served the world's governments, institutions and financial advisors. With a rigorous, risk-aware approach built on research, analysis and market-tested experience, we build from a breadth of index and active strategies to create cost-effective solutions. And, as pioneers in index, ETF, and ESG investing, we are always inventing new ways to invest. As a result, we have become the world's fourth-largest asset manager¹ with US $3.26 trillion⁵ under management.

About Annexus Retirement Solutions

Annexus Retirement Solutions designs, develops, and facilitates distribution of institutional lifetime income products that help Americans solve their biggest challenge in retirement—outliving their money. Founded in 2020, the company's over-arching philosophy centers on delivering better participant outcomes through innovation. It is led by industry veterans with a combined 175 years of experience in retirement plans, annuities, and asset management. Annexus Retirement Solutions is headquartered in Scottsdale, Arizona. Learn more about Annexus Retirement Solutions at www.annexusretirementsolutions.com.

About Nationwide

Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor's. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities, mutual funds and ETFs; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.

About Athene

Athene Annuity and Life Company (61689), is headquartered in West Des Moines, Iowa, and issues annuities in 49 states (excluding NY) and in D.C. Athene Holding Ltd., through its subsidiaries, is a leading financial services company specializing in retirement services with total assets of $246.0 billion as of December 31, 2022 and operations in the United States, Bermuda, Canada, and Japan. Athene specializes in helping its customers achieve financial security and is a solutions provider to institutions. Founded in 2009, Athene is Driven to Do More for our policyholders, business partners, shareholders, and the communities in which we work and live. For more information, please visit www.athene.com.

¹ Pensions & Investments Research Center, as of 12/31/21.
² Lifetime Income Builder is a group fixed indexed annuity with a guaranteed lifetime withdrawal benefit (a "FIA"). The withdrawal benefit is subject to the claims paying abilty of the insurers and insurers do not guarantee that participants will receive lifetime income.
³ The value of the target date fund account is measured on the last business day of each calendar quarter and the last business day of the month prior to income activation, and then the highest measured value is locked in. The high-water mark is not measured until the fund begins to allocate to the fixed indexed annuity.
⁴ 6% is a targeted percentage and there is no assurance that the funds will be able to make payments that meet the targeted percentage. Actual percentage may vary. See detailed disclaimers at the end of this press release regarding actual percentage.
⁵ This figure is presented as of September 30, 2022 and includes approximately $55.12 billion of assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street are affiliated. Please note all AUM is unaudited.

Important Risk Information:

Investing involves risk including the risk of loss of principal. Such activities may not be suitable for everyone.

Each target date fund in the Series is established by Global Trust Company and held in the GTC Retirement Income Builder Collective Investment Trust (the "Trust"). The Trust is a bank-sponsored collective investment trust and not a mutual fund. Global Trust Company serves as trustee of the Trust, manages the Trust, and has ultimate investment authority for each fund in the Series. State Street Global Advisors manages a portion of the solution's underlying assets and provides Global Trust Company with glidepath recommendations for the funds within the Series.

Lifetime Income Builder is a group fixed indexed annuity with a guaranteed lifetime withdrawal benefit (a "FIA"). Each TDF may invest in more than one FIA, collectively which are referred to throughout this presentation as "Lifetime Income Builder." Annexus Retirement Solutions, LLC is the inventor of Lifetime Income Builder. The FIA guarantees are made to the TDF, not to the participants. Participants are not beneficiaries of any annuity contract. Lifetime Income Builder is not provided by or guaranteed by Global Trust Company, State Street Global Advisors, Annexus Retirement Solutions or any of their affiliates.

Each fund is designed to provide participants target annual income of 6% at income activation and a target minimum lifetime income percentage of 4.5%. The target percentages are goals and there is no assurance that the funds will be able to make payments that meet either target percentage. All income payments to participants, regardless of the percentage, are always dependent on the trustee.

The funds invest in FIAs that are intended to back the Trust's investment objectives, lifetime income. Each FIA is issued by an insurance company to the trustee. The FIAs provide guaranteed payments to the Trust and are subject to the claims-paying ability of the issuing insurance companies. If the value of the other investments in the fund reaches zero at or after income activation, income payments are adjusted to the cumulative guaranteed percentage provided to the Trust by the FIAs, which is targeted to be the target minimum lifetime income percentage of 4.5%. The actual annual income percentage and actual minimum lifetime income percentage are dependent on economic factors and may be more or less than what is targeted. There are possible, but extreme, market conditions where the FIAs' cumulative guaranteed percentage that is provided to the Trust could be less than 4.5%. Therefore, we use the term "target minimum lifetime income percentage" to properly reflect the potential for such scenario. In that scenario, the FIAs would still provide guaranteed payments to the Trust, but it would be something less than the targeted minimum of 4.5%, and payment of income to the participants would remain dependent on the trustee.

If a participant selects the joint income option offered by the fund, the actual payment percentages will be less than 6% and 4.5%, but instead of income payments terminating upon the death of the participant, income payments will continue to be made to the joint beneficiary if the joint beneficiary outlives the participant.

Current target annual income and target minimum lifetime income percentages reflect economic conditions at the time each fund is created. Future funds in the Series could have lower or higher targeted percentages based on economic conditions at the time of the fund's creation. Please refer to the Offering Memorandum for more information on the risks of not receiving income payments.

The funds are designed for investors expected to retire around the year indicated in each fund's name. When choosing whether to invest in the fund for which an investor age qualifies, investors should consider whether they anticipate retiring significantly earlier or later than age 65 even if such investors retire on or near a fund's target date. There may be other considerations relevant to determining whether investment in the fund best meets their individual circumstances and investment goals. The funds' asset allocation strategy becomes increasingly conservative as it approaches the target date and beyond. The investment risks of each fund change over time as its asset allocation changes.

An investment in a fund is not a bank deposit and is not insured or guaranteed by the insurance companies, the trustee, State Street Global Advisors, the Federal Deposit Insurance Corporation ("FDIC"), or any other government agency. The Trust is not insured by the FDIC and is not registered with the Securities and Exchange Commission.

Each FIA is issued by an insurance company to the trustee. The FIAs do not create any third-party beneficiary relationships or third-party beneficiary rights for any other person or entity. The insurers do not guarantee that participants will receive lifetime income.

The information provided herein does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security or a product, or a recommendation of the suitability of any investment strategy for a particular investor. It does not take into account any investor's particular objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

All information is from State Street Global Advisors unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. Further, third party data providers make no warranties or representations of any kind relating to the accuracy, completeness or timeliness of the data and have no liability for damages of any kind relating to use of such data.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without State Street Global Advisors' express written consent.

The entities reflected here have collaborated together to bring this solution to market; none of the collaborating listed entities are affiliated entities.

© 2023 State Street Corporation – All Rights Reserved.

5476080.1.1.AM.RTL

Exp. Date: 2/29/2024

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SOURCE Annexus Retirement Solutions

FAQ

What is the State Street GTC Retirement Income Builder Series?

The State Street GTC Retirement Income Builder Series is a target date investment solution aimed at helping Americans achieve a reliable income in retirement.

What are the annual income targets for the State Street GTC Retirement Income Builder Series?

The Series targets an annual income rate of 6% at the time of income activation.

Who are the partners involved in the launch of the State Street GTC Retirement Income Builder Series?

The partners include Global Trust Company, State Street Global Advisors, and Annexus Retirement Solutions.

What retirement risks does the State Street GTC Retirement Income Builder address?

It addresses sequence of return risk and longevity risk through its innovative design.

How much does State Street manage in target date strategies?

State Street manages nearly $136 billion in target date strategies.