Prudential, Fidelity collaborate on new decumulation option for DC plans
The firms say that 100,000 people will benefit from the new product.
Thousands of Americans with workplace retirement plans will be able to access a new way to turn their savings into a protected stream of income.
Prudential Financial and Fidelity Investments are collaborating on a new single-premium immediate annuity available through employer-based retirement plans administered by Fidelity. Prudential is one of four insurers included on the Fidelity’s Guaranteed Income Direct platform to offer embedded distribution through defined contribution plans.
Prudential SimplyIncome is part of the insurer’s commitment to developing new methods of delivering retirement income and Ann Nanda, head of Future Growth Initiatives and Distribution Enablement at Prudential Retirement Strategies says that the collaboration with Fidelity facilitates this.
“No one knows how long they’ll live, and it’s important for people to understand whether they will be at risk of running out of money in retirement,” she said. “Prudential SimplyIncome provides a new decumulation option for plan participants looking for a predictable retirement income solution, delivered through a streamlined, tech-forward experience on Fidelity’s Guaranteed Income Direct platform.”
It has been easier to offer SPIA options since the SECURE Act of 2019 and the legislation also made it mandatory for DC plans to simplify the way that investors are shown how much retirement income their savings can generate.
“Prudential SimplyIncome is an example of how we are co-creating innovative solutions for employer-based retirement plans, in this case working with a top plan administrator to bring a protected income option to plan sponsors and participants within a system they already know.” said Nanda. “It’s an additional option to complement the many great solutions that exist for individual retirement account owners outside of workplace plans.”
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