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Nationwide Adds In-Plan Group Indexed Annuity: Pension and Group Annuity Update

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Nationwide is introducing a group non-variable indexed annuity designed for use inside retirement plans.

Nationwide says the Nationwide Indexed Principal Protection group annuity will be part of a new family of in-plan group annuities. The Columbus, Ohio-based insurer is preparing to launch the other in-plan annuities in 2021.

(Related: Nationwide Enters Pension Risk Transfer Annuity Market)

Plan participants can invest in the annuity without meeting an investment minimum.

The crediting rate for the annuity will be linked to the performance of the S&P 500 Daily Risk Control 5% USD Excess Return Index.

Nationwide will provide a crediting rate floor of 0%, meaning that it has promised to protect the value of the plan participants’ principal even if the S&P 500 Daily Risk Control 5% USD Excess Return Index goes down.

Participants can move cash into the annuity up to four times per year, and they can move cash out of the annuity at any time without incurring a contingent deferred sales charge.

Nationwide says the other products in the new in-plan group annuity family will be lifetime income options that connect income guarantees with use of target date funds. The new funds will annuities will be designed to meet qualified default investment alternative standards, the company says.

Nationwide is issuing the product through Nationwide Life Insurance Company.

In other group annuity market news:

Transamerica — a Baltimore-based arm of Aegon — says it will work with another Aegon affiliate, Aegon Asset Management, to  offer a Transamerica DB Complete package of defined benefit pension plan management services.

The package will include pension consulting services, fiduciary advisory services, and fixed-income investment advisory services.

In related news, the Pasadena Chamber of Commerce has picked Transamerica to be the recordkeeper for a new multiple employer retirement plan, or MEP.

The chamber has relationships with 1,400 member organizations.

Another organization, the Medical College of Wisconsin has agreed to extend a 403(b) retirement plan recordkeeping relationship with Transamerica. The plan has about 6,400 participants.

MetLife Inc., a New York-based insurer, says its Metropolitan Tower Life Insurance Company unit has reinsured about $320 million in pension liabilities for Rothesay PLC of London.

In related news, MetLife says a survey of 200 pension plan sponsors shows that the market continues to be stable, in spite of the COVID-19 pandemic and related economic disruption.

About 27% of the sponsors said the pandemic has had no effect on their pension risk transfer plans, and 55% said the pandemic has increased the likelihood that they will seek to transfer pension risk transfer, or increased the likelihood that they will close a pension risk transfer deal earlier than expected.

About 89% of the sponsors said they will use a Coronavirus Aid, Relief, and Economic Security (CARES) Act provision that extends the deadline for making defined benefit pension plan contributions to Jan. 1, 2021.

Legal & General Retirement America says it completed six U.S. pension risk transfer deals in the third quarter. The deals had a total value of about $628 million.

The Stamford, Connecticut-based arm of Legal & General Group PLC estimates that all players in the U.S. pension risk transfer market closed about $4 billion in deals in the third quarter.

The third quarter started July 1 and ended Sept. 30.

Allianz Life Insurance Company of North America says 71% of the employer-sponsored retirement plan participants it surveyed would like an in-plan option that offers guaranteed income, and 58% said they would like an in-plan annuity.

About 68% of the survey participants said they want protection against investment market downturns.

— Read Pension Risk Transfer Capacity Is Still Out Thereon ThinkAdvisor.

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