New York Life Investments announced Tuesday that it has launched a guaranteed interest pension account to allow sponsors to structure part of their assets to mirror liability cash flows.
The guaranteed interest pension account is a group annuity contract issued by New York Life Insurance Company, the AAA-rated parent company of New York Life Investments. Contributions are invested in a broadly diversified fixed income portfolio within New York Life’s general account. The account features a declared interest crediting rate that resets every six months.
One of the benefits of the guaranteed interest pension account, according to New York Life, is that it answers thePension Protection Act's requirement that liabilities be accounted for in the near term segment, or the first five years of a plan, by providing an investment option with a guarantee of principal and competitive yields.
“The PPA changed the investment dialogue for pension plans,” Steven Dorval, managing director and head of retirement investments at New York Life Investments, said in a press release. “Sponsors and advisors are focused on funding their liabilities. We are working with clients to help meet their liability needs within the three distinct liability segments defined by the PPA, as they consider a range of options, including moving toward a liability driven investment (LDI) model. GPA is a solid solution.”