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

Rhea-AI Summary

State Street Global Advisors has launched IncomeWise™, a deferred lifetime income solution, within the University of California's defined contribution plans, serving over 300,000 participants with assets exceeding $34.6 billion.

IncomeWise™ combines traditional target date funds' flexibility with guaranteed lifetime income, addressing growing retirement security needs. The solution utilizes a qualified longevity annuity contract (QLAC) to convert savings into a secure income stream during retirement. State Street partnered with MetLife for annuity provision, aiming to enhance financial stability for participants.

Positive

• Launch of IncomeWise™ creates a new retirement income strategy, enhancing financial security for participants.
• Collaboration with MetLife ensures a reliable annuity provision, supporting guaranteed income for retirees.

Negative

• None.

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

BOSTON--(BUSINESS WIRE)-- State Street Global Advisors (State Street), the asset management business of State Street Corporation (NYSE: STT), in partnership with the University of California (UC), today 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

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.

“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.

“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.”

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 active and index strategies to create cost-effective solutions. As stewards, we help portfolio companies see that what is fair for people and sustainable for the planet can deliver long-term performance. 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 third-largest asset manager with US $3.9 trillion* under our care.

*This figure is presented as of September 30, 2021 and includes approximately $60 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 Global Advisors are affiliated.

About the UC Retirement Savings Program

The UC Retirement Savings Program is the defined contribution program of the University of California consisting of the 403(b), 457(b) and 401(a) plans with assets of $34.6 billion serving over 300,000 participants.

About MetLife

MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 markets globally and holds leading positions in the United States, Japan, Latin America, Asia, Europe, and the Middle East.

Important Risk Information

All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone.

The information provided does not constitute investment advice and it should not be relied on as such.

© 2021 State Street Corporation - All Rights Reserved

3858979.1.1.GBL.RTL

---

¹ Source: UC Regents, as of June 30, 2021.
² Payment of the lifetime income is subject to the claims-paying ability of the issuing insurance company; it is possible that the issuing company may not be able to honor the income payouts at any time. Neither IncomeWise nor the Deferred Lifetime Income feature are insured by the FDIC or by another governmental agency; they are not obligations of the FDIC or deposits or obligations guaranteed by State Street Global Advisors. The Deferred Lifetime Income feature is not provided by or guaranteed by State Street Global Advisors or any affiliate of State Street Global Advisors.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211129005123/en/

State Street

Olivia Offner

ooffner@statestreet.com

+1 617 662 0198

Source: State Street Corporation

FAQ

What is IncomeWise™ by State Street?

IncomeWise™ is a deferred lifetime income solution launched by State Street Global Advisors to provide guaranteed income for retirement.

How many participants benefit from the University of California's retirement plans?

Over 300,000 participants benefit from the University of California's defined contribution plans.

What assets are included in the University of California's retirement plans?

The retirement plans include more than $34.6 billion in assets.

Which companies partnered to launch IncomeWise™?

State Street Global Advisors and MetLife partnered to launch IncomeWise™ for retirement plans.

When was the Deferred Lifetime Income enhancement introduced to UC's target date fund?

The Deferred Lifetime Income enhancement was introduced in August 2021.