T. Rowe Price rolls out new managed lifetime income solution

T. Rowe Price is building on its leadership in the retirement space through a new tie-up with Pacific Life.

On Tuesday, the firm announced the launch of Managed Lifetime Income, a retirement solution aimed at providing predictable, lifelong income for retirees in defined contribution plans.

The offering blends a managed payout investment from T. Rowe Price with a qualifying longevity annuity contract from Pacific Life, creating a product that combines professional asset management with guaranteed monthly payments.

The MLI solution builds on T. Rowe Price’s previous experience in managed payout products, such as the Retirement Income 2020 and Retirement Income 2025 funds. This latest product allows participants to select an option with a guaranteed income stream, adding more flexibility for retirees.

"T. Rowe Price recognizes the diverse retirement income needs of plan participants and is committed to offering a wide range of solutions to empower them with choice and flexibility," Francisco Negrón, head of retirement plan services at T. Rowe Price, said in a statement.

"We understand that a common concern among retirees is whether they will have sufficient income for their remaining years," he said, underscoring his firm's "dedication to ensuring retirees can feel financially secure about their future."

The MLI solution offers payments from the managed payout investment during the first 15 years of retirement, followed by lifetime payments from the QLAC provided by Pacific Life.

The plan also integrates with T. Rowe Price’s retirement income estimator, allowing participants to tailor their savings and optimize monthly income. T. Rowe Price assumes the fiduciary responsibility of selecting and monitoring the QLAC provider.

"MLI represents an innovative advancement in retirement planning," said Michael Oler, head of defined contribution lifetime income at Pacific Life. "By pairing MLI's robust approach to asset management with the security of a QLAC, we are creating a simple yet dynamic approach to helping participants retire more confidently."

T. Rowe Price's latest offering exemplifies a broader trend of innovation in the retirement income space, which has seen new retirement plan options from the likes of BlackRock, State Street, and JPMorgan Asset Management.

According to recent 401(k) data from T. Rowe Price, 52 percent of participants aged 60 and older maintain their assets in-plan for at least four years after retirement. A recent white paper by the firm explores strategies that combine drawdown plans with deferred annuities, which may better meet the income needs of retirees looking for both liquidity and guaranteed income.