JPMorgan Jumps Into 401(k) Annuity Market

Some of the provisions in Setting Every Community Up for Retirement Enhancement Act of 2019 and its sequel, the Secure 2.0 Act, were designed to support the sale of in-plan annuitization options.

AllianceBernstein, State Street and TIAA are examples of other companies that have introduced lifetime income spigots for target-date funds.

BlackRock recently launched the LifePath Paycheck program. Like the SmartRetirement program, BlackRock’s program emphasizes participants’ ability to choose annuities from large, well-known annuity providers.

Equitable executives said during a conference call with securities analysts that Equitable had received about $500 million in deposits from four BlackRock LifePath Paycheck clients in the second quarter, and Brighthouse Financial executives said Brighthouse had received $340 million in deposits from the LifePath Paycheck program.

The J.P. Morgan program: Participants in the new J.P. Morgan can start by choosing target-date funds that align with their expected retirement years, the company said.

When a participant retires, the participant can create a personalized retirement income plan using program funds.

“The new lifetime income feature will allow electing participants to draw down their stable value balance over an expected time horizon correlated with average life expectancies,” J.P. Morgan said. “And then, upon meeting certain requirements, the participants will begin to receive annuity income directly from the supporting insurers.”

The program was created by the people who manage J.P. Morgan’s target-date funds.

(JPMorgan’s headquarters in New York. Credit: John Marshall Mantel/Bloomberg)