1,000 Employers Now Offer TIAA's Lifetime Income Solutions
TIAA and Nuveen announced that 1,000 employers are now offering their lifetime income target-date solutions for retirement plans. The companies state that adoption is accelerating as workers seek a return to guaranteed income benefits similar to traditional pensions. TIAA and Nuveen currently have $75 billion in assets under management in these solutions.
- The growth of these solutions has been significantly aided by the SECURE Act of 2019 and SECURE 2.0 of 2022. These laws created a "safe harbor" that reduces liability for employers, making them more comfortable with offering in-plan annuity products. - These products are filling a void left by the disappearance of traditional defined benefit pensions; today, only 14% of private sector workers have access to a pension, down from as high as 60% in previous decades. - The "lifetime income" feature is typically achieved by embedding an annuity, an insurance contract that provides a guaranteed stream of payments, directly into the structure of a target-date fund. - TIAA and Nuveen's specific offerings include TIAA RetirePlus and the Nuveen Lifecycle Income CIT Series, which are often set up as the Qualified Default Investment Alternative (QDIA) for employees. This means workers are automatically enrolled in the fund unless they actively choose another option. - Target-date funds (TDFs) are a popular retirement savings vehicle, making them a natural fit for these income solutions. At the end of 2022, 59% of all 401(k) participants were invested in TDFs. - Within the fund's structure, the guaranteed annuity component often serves as a replacement for the traditional fixed-income or bond allocation, especially as the participant nears their retirement date. - TIAA has also formed strategic partnerships to widen the availability of its lifetime income solutions, including an agreement with Transamerica to offer the Nuveen Lifecycle Income CIT Series as a default option in the retirement plans it manages. - The market for target-date funds with built-in income features is expanding across the industry. One research firm noted that assets in these types of products grew from $83 billion at the end of 2024 to $103 billion by the middle of 2025.
