Allianz Launches Annuity In First Foray Into Defined Contribution Market

July 22, 2021

Allianz Life Insurance Company of North America is getting involved in the retirement plan business, and it is doing so via an annuity.

The Minneapolis-based insurance giant today announced that it is launching the Allianz Lifetime Income+ Annuity, a product intended for use in employer-sponsored retirement plans as a guaranteed income option for plan participants that can supplement Social Security and pension income.

“Participants face many risks in retirement, including longevity, inflation, market volatility and the need for growth and flexibility to adapt to changing circumstances,” said Matt Gray, head of employer markets for Allianz Life, in a prepared statement. “Having this ongoing source of guaranteed income will help plan participants fund a retirement that could last 20 or 30-years or even longer.”

According to recent Allianz research among plan participants, nearly three-quarters of participants in workplace retirement plans would consider products offering guaranteed income for life. This interest has grown because of the recent market volatility caused by the Covid-19 recession and recovery.

In the same research, Allianz found that participants view lifetime guaranteed income options within employer retirement plans as a sign that employers care about their well-being and a driver of employee loyalty.

In 2019, Congress paved the way for greater inclusion of annuities in workplace retirement plans like 401(k)s via the passage of the SECURE Act, legislation that altered many of the rules around retirement savings and income distribution.

That legislation comes as tens of thousands of younger baby boomers face a retirement in which they must convert the lifetime of savings in workplace plans like 401(k)s and in individual accounts like IRAs into income to help cover their expenses, which forces them to navigate tax policy, retirement plan rules and difficult decisions on when and where to buy or sell investments. A 401(k) annuity option holds the potential to eliminate some of this decision-making.

The Lifetime Income+ Annuity is designed to offer growth potential, some security against market losses and guaranteed income that has the ability to escalate over time, according to Allianz.

As part of its foray into the workplace retirement space, Allianz also announced that it is hiring Mike De Feo to lead a new defined contribution distribution team. After a stint at Nuveen working with retirement plans, De Feo most recently led the retirement and defined contribution business at Voya Investment Management.

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