Investment firms team with AFL-CIO to offer DC funds

Wilmington Trust, BNY Mellon and PGIM Fixed Income all play a role in the target-date CITs the union is rolling out for its members' defined-contribution plans.

The AFL-CIO is collaborating with Wilmington Trust, BNY Mellon, PGIM Fixed Income and AFL-CIO ITC Financial to offer 12 new target-date collective investment trust funds to its 56 unions and 12.5 million members.

“Defined benefit plans remain the bedrock of a secure retirement,” the union federation said in a release, “[but] this important extension of the AFL-CIO suite of branded investment products ensures that defined contribution investors’ interests are protected and provides a cost-effective solution that brings this proposition to life.”

Wilmington Trust will serve as trustee for all 12 funds, while BNY Mellon will provide the glide path and index management for the funds. PGIM Fixed Income will manage the fixed-income component of the products, and AFL-CIO ITC Financial, the broker-dealer subsidiary of the AFL-CIO Investment Trust Corp., will handle distribution.

The target-date funds are being offered in five-year increments and carry a flat fee of 12 basis points for all investors. CITs are pooled, tax-exempt investment vehicles sponsored and maintained by a bank or trust company that also serves as the trustee.