Empower partners with Allianz Life for first fixed index annuity

Empower, the nation’s second-largest retirement plan provider, is wading into the fixed index annuity space through a new partnership with Allianz Life.

Under the partnership, Empower is rolling out Allianz Lifetime Income+ on its platform, which boasts over $1.6 trillion in administered assets.

With its first fixed index annuity offering, Empower is addressing a growing concern among Americans: securing reliable income streams throughout retirement.

“This partnership aligns with our shared vision of increasing access to guaranteed lifetime income and it will allow participants to have a wider range of options to build and protect their future income,” Matt Gray, head of employer markets at Allianz Life, said in a statement Thursday.

According to Limra's latest figures, fixed index annuity sales reached a new three-month record of $35.2 billion in the third quarter this year, marking a 56 percent year-on-year increase.

Allianz Lifetime Income+ is designed for defined contribution plans, such as 401(k)s, offering market downturn protection, interest-earning potential, and flexible income strategies. Among other benefits, participants also retain access to the annuity’s cash value, even after initiating lifetime withdrawals. 

The partnership comes at a time when demand for annuity options in employer-sponsored plans is rising. According to a study from Allianz Life, 61 percent of individuals with employer-sponsored plans worry about running out of money during retirement. Another 75 percent of respondents said they would consider adding a guaranteed lifetime income option to their plan, while 73 percent would pay an additional fee for advice programs to support these decisions.

Empower’s chief product officer, Tina Wilson, emphasized how rising longevity risk makes retirement income planning more crucial than ever.

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“Americans are living longer than ever before, therefore it is imperative to provide a diverse range of options to help them create a sustainable income stream that aligns with their desired lifestyle,” she said.

The new annuity will soon be accessible to Empower’s 18 million customers and 80,000 retirement plans, integrating with the company’s Managed Account and Advisor Managed accounts, which are powered by Morningstar Retirement.