AllianceBernstein unlocks new retirement income option for DC plans

The new strategy, which offers lifetime income and higher growth asset exposure during retirement, will also be available as a CIT.

Global investment firm AllianceBernstein is expanding its retirement income options with a new offering for defined contribution plans.

The firm announced Thursday that it’s adding the AB Secure Income Portfolio to its catalog of options for DC plans.

The new solution aims to offer DC plans a vehicle that delivers guaranteed retirement income to participants while maintaining their existing target-date fund provider. It can also be included as part of a qualified default investment alternative, or used as an allocation in a managed account.

The portfolio is designed to offer lifetime income and greater growth asset exposure for retirees compared to typical target-date funds, while still providing participants much-needed liquidity and access to their assets.

Just recently, BlackRock fired a major shot across the bow in the retirement space as it launched a new paycheck-for-life solution aimed at DC plan participants.

“As more plan sponsors evaluate the retirement income solutions available today and move toward adoption, many are looking for more flexibility in the ways they can implement these solutions,” Jennifer DeLong, head of defined contribution at AllianceBernstein said in a statement.

The AB Secure Income Portfolio, which has been a core component of the firm’s mainstay Lifetime Income Strategy for over a decade, is currently available as an institutional separate account and will soon be available as a collective investment trust managed by AllianceBernstein.

Appetite for CITs has been strong and steady. According to a report published by Sway Research earlier this year, assets in CITs within the target-date space ended 2023 at $1.71 trillion, representing a 26 percent annual growth rate and within striking distance of the $1.76 trillion held by mutual funds, historically the investment vehicle of choice for retirement investors.

“Providing plans with a new way to access lifetime income through a DC-friendly CIT will give plan sponsors the convenience and optionality they’re looking for,” DeLong said.