TIAA offers annuity to corporate retirement plans

The deferred fixed annuity is designed to be used as an allocation within managed accounts or custom target-date model portfolios in 401(k)s.

Expanding beyond its higher education and nonprofit market, pension giant TIAA is offering a deferred fixed annuity to the corporate retirement plan market for the first time.

Known as the TIAA Secure Income Account, the annuity is fully cashable during employees’ working years, and participants can take the account with them if they leave their employers or the workforce.

The annuity is designed to be used as an allocation within managed accounts or custom target-date model portfolios in 401(k) plans. Employees can choose, but are not required, to annuitize some or all the money in the account when they stop working.

“If the annuity is part of a plan’s Qualified Default Investment Alternative (QDIA), it can turn participant inertia into an advantage, enabling plan sponsors to automatically direct plan participants to a product with principal protection, guaranteed growth, low volatility and lifetime income with potentially increasing payments,” TIAA said in a release, adding that employees who choose to annuitize will not pay any expenses or commissions.

TIAA said the account is available through its defined-contribution investment-only distribution channel overseen by Nuveen, its asset manager.

[More: Getting annuities onto 401(k) menus]