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Retirement Planning > Retirement Investing > Annuity Investing

TIAA Adds Annuity Option for 401(k) Plans

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What You Need to Know

  • The TIAA Secure Income Account is overseen by Nuveen, TIAA's $1.2 trillion asset management subsidiary.
  • The account is designed as an allocation within managed accounts or custom target-date portfolios.
  • Employees enrolled in the account can take it with them when they retire and receive guaranteed income for life.

TIAA, a provider of workplace-based retirement plans, has added a deferred fixed annuity option for corporate 401(k) plans.

The TIAA Secure Income Account (SIA) is distributed by Nuveen, a TIAA subsidiary and asset manager with $1.2 trillion in assets.

“People are living longer and need help preparing for a secure retirement, yet few corporate defined contribution plans offer the guaranteed lifetime income they need,” said Thasunda Brown Duckett, president and CEO of TIAA, in a statement. “Building on our heritage, we are offering companies of all types and their employees a solution to more efficiently save, invest and ensure those assets last through retirement.”

The TIAA Secure Income Account is designed as an allocation within managed accounts or custom target-date model portfolios in 401(k) plans and can be part of a plan’s qualified default investment alternative (QDIA).

The account provides protection of principal, guaranteed growth, low volatility and lifetime income with potentially increasing payments. Employees who choose to annuitize will not pay any expenses or commissions. Balances have minimum guaranteed rates between 1% and 3% that are reset each March.

Enrollees can take the account with them when they leave their employer or the workforce. Once retired, they have the option of turning some or all of their savings in the account into monthly income paychecks for life.

TIAA is among a growing number of retirement plan providers, including BlackRock, that are offering an annuity option in 401(k) accounts following passage of the Setting Every Community Up for Retirement Enhancement Act, which took effect in January 2020.

Among other provisions, the act created a fiduciary safe harbor for retirement plan sponsors that offer an annuity option in defined contribution plans so long as the sponsor meets minimum fiduciary requirements in choosing the annuity provider. Employers are no longer liable for losses resulting from an annuity provider’s inability to satisfy its financial obligations under terms of such a contract.

Pictured: TIAA CEO Thasunda Brown (Photo: TIAA)


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