JPMorgan jumps on the lifetime income bandwagon

JPMorgan has joined the growing roster of challengers in the lifetime income arena as its asset management arm unveils its own answer to Americans’ retirement income crisis.

JPMorgan Asset Management, which provides investment solutions to retirement plans, has introduced SmartRetirement Lifetime Income, a new target date retirement solution aimed at simplifying the transition from saving to generating steady income during retirement.

The firm said its new offering is designed to reduce portfolio volatility as participants approach retirement while providing access to lifetime income streams through participating insurance companies.

“Retirement savers want a solution that turns complexity into clarity, allowing them to have the certainty of a source of income they cannot outlive, without giving up control of their savings,” Steve Rubino, head of retirement for JPMorgan Asset Management, said in a statement.

“This solution simplifies the saving and spending phases of retirement savings, leverages products familiar to plans and participants, and makes it easy to adjust your retirement income strategy as life’s priorities change,” Rubino said.

The SmartRetirement Lifetime Income solution allows participants to save using target date funds and then transition to a customized retirement income strategy. The income is supported by multiple insurers chosen by JPMorgan Asset Management, which the firm anticipates will include Equitable and Prudential.

The strategy involves drawing down stable value balances over time and, upon meeting certain criteria, converting those balances into annuity income provided by the insurers.

“The combination of JPMorgan’s extensive investment capabilities with a solution offered by insurers that is designed to provide lifetime income will help more people achieve their retirement goals,” said Dan Oldroyd, head of target date strategies at JPMorgan Asset Management.

He said that compared to using annuity products alone, incorporating annuity contracts into target date funds can offer greater transparency for investors. Still, experts say adding an annuity twist complicates things for target date investors in retirement plans.

Aside from blending the firm’s investment expertise with third-party annuity capabilities, SmartRetirement Lifetime Income leverages JPMorgan’s participant savings data and Chase’s spending data spanning 66 million households to offer a personalized approach, with options for creating retirement income plans using either the Lifetime Retirement Income Fund or the Flexible Retirement Income Fund.

JPMorgan’s foray into the lifetime income space follows others who have unveiled their own target date fund-plus-annuity solutions. In April, BlackRock launched its LifePath Paycheck solution, which is designed to give plan participants a reliable, paycheck-like income in retirement. State Street followed suit in June with an enhancement to its IncomeWise target date funds.