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Having made its reputation in the academic, teaching and similar fields, but remaining unknown in parts of the corporate world, TIAA is seeking to solve that problem through its recently announced guaranteed pension-like income for life to the corporate world.
"We've gone largely unnoticed in the corporate retirement industry," Phil Maffei, managing director of TIAA's corporate income retirement products, said in a recent interview.
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TIAA wants to remedy that through its Secure Income Account.
The income account is a fixed annuity intended to help build guaranteed growth and offer lifetime income, TIAA said. It is designed to help those who are unengaged with their retirement plans. The plan is fully liquid to plan participants and it protects balances from losing value, according to TIAA.
"Take a portion of your 401(k) balance, convert it to lifetime income and you can sleep at night," Maffei said. Participants are able to leave the rest of their assets invested and possibly take additional risks, he added.
"Participants have a variety of options at retirement (subject to plan rules)," the company said, in announcing the program. "They can select full or partial lump-sum withdrawals, convert some or all of their accumulation to guaranteed lifetime income, or use both withdrawals and lifetime income to tailor their retirement income strategy to meet their needs."
When participants are ready, they can choose when and how much to convert to lifetime income so they can be certain they (and a spouse or partner they may choose) will have predictable, protected income they cannot outlive—an option not typically available with other investments, according to TIAA.
"People are living longer and need help preparing for a secure retirement, yet few corporate defined contribution plans offer the guaranteed lifetime income they need," said Thasunda Brown Duckett, president/CEO of TIAA said, in explaining why the company developed the new product. "Building on our heritage, we are offering companies of all types and their employees a solution to more efficiently save, invest and ensure those assets last through retirement."
And the company emphasized the advantages of lifetime income solutions.
"We know lifetime income solutions have the power to transform defined contribution plans, because it elevates them from simple savings accumulation vehicles into true retirement investing and payout plans," said Colbert Narcisse, TIAA's chief product and business development officer.
TIAA is out in the market and is "talking with everyone," Maffei said. "The reception has been good."
And TIAA said the organization is not done with offering new products, saying the plan is "the first in a series of innovative lifetime income solutions TIAA plans for a variety of retirement savings vehicles, including employer-sponsored and individual IRAs."
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