The new asset allocation program will help 401(k) plan participants convert their savings over time into guaranteed income that lasts throughout retirement.
The ING Lifetime Income Protection Program is initially being offered to customers in ING’s corporate defined contribution plans. It provides participants with a series of target date asset allocation models, or “portfolios,” that help build critical retirement savings followed by an income benefit for life, guaranteed by multiple leading insurers.
ING worked closely with AllianceBernstein to design a program that leverages the firm’s multi-insurer platform, while incorporating both guaranteed and non-guaranteed components into one consolidated program.
The non-guaranteed component consists of multi-manager, target-date collective investment trust funds. These funds seek to leverage the benefits of both active and passive investment strategies from several fund companies. ING’s asset manager, ING Investment Management, oversees these collective trusts. AllianceBernstein also serves as an investment manager.
The guaranteed component, which is triggered at a certain time as a participant gets closer to retirement, is provided through multiple insurance contracts, each issued by one of three insurance companies — ING’s own ING Life Insurance and Annuity Company, as well as AXA Equitable Life Insurance Company and Nationwide Financial. Investors benefit by having ING provide a single, consolidated program with the multiple insurance companies splitting the responsibility under the contracts. This diversifies risk and helps participants receive competitive payouts.
Other benefits and features of the ING Lifetime Income Protection Program include:
• Contracts that offer the potential for income growth from market gains as well as income protection against market losses through a minimum guaranteed withdrawal benefit (MGWB). This feature provides participants with a stream of guaranteed retirement income for life.
• Flexibility for participants to withdraw their assets or transfer to other investment options at their convenience — giving them full control while in the program.
• A cost structure designed to benefit participants by allowing them to pay for the MGWB guarantee only when assets are allocated to the contracts available through the portfolio.
• A platform that adheres to the recommended recordkeeping standards established in support of plan sponsor portability by The Society of Professional Asset-Managers and Record Keepers (SPARK) Institute.