T. Rowe Price launches new in-plan lifetime income solution

To further solidify the strong trend of retirement in-plan lifetime income solutions, T. Rowe Price has announced the launch of Managed Lifetime Income (MLI), a new offering designed to provide retirees in a defined contribution plan with stable and predictable monthly income for life.

MLI combines a managed payout investment from T. Rowe Price with a Qualifying Longevity Annuity Contract from Pacific Life, a leading provider of innovative insurance and annuity solutions, to offer a unique union of professional asset management and guaranteed monthly payouts.

T. Rowe Price’s new offering follows BlackRock’s LifePath Paycheck, which launched earlier this year and was regarded as a “game changer” for the industry, which is “looking for solutions that will help more Americans achieve better retirement outcomes,” said Carrie Schroen, Head of BlackRock’s U.S. Defined Contribution Intermediary Business.

In fact, “82% of retirement plan advisors are either currently recommending an income product or plan to in the next 12 months …,” said Schroen. “The appetite and demand for retirement income solutions has never been higher – 99% of savers say it would be financially helpful to receive guaranteed income in retirement.”

Also, according to Nationwide’s Protected Retirement survey report, employers and plan sponsors must prioritize guaranteed income options in 401(k)s as a necessity — not just a “nice-to-have” option.

T. Rowe Price already has a strong background in managed payout products with the introduction of Retirement Income 2020 in 2017, followed by Retirement Income 2025.

Its newest option, MLI, expands on the managed payout investment portion by adding a guaranteed component. Together, these retirement income solutions give T. Rowe Price clients the ability to choose the product that best fits their needs: a solution with guaranteed income or one without it.

T. Rowe Price “is committed to offering a wide range of solutions to empower them with choice and flexibility,” said Francisco Negrón, head of Retirement Plan Services at T. Rowe Price. “We understand that a common concern among retirees is whether they will have sufficient income for their remaining years.”

Participants who choose MLI will receive payments from the managed payout investment for the first 15 years of retirement, and then guaranteed QLAC payments from the insurer will continue for the participant’s lifetime. T. Rowe Price accepts the fiduciary responsibility for the selection and monitoring of the QLAC provider.

“By pairing MLI’s robust approach to asset management with the security of a QLAC, we are creating a … dynamic approach to helping participants retire more confidently,” said Michael Oler, head of Defined Contribution Lifetime Income at Pacific Life. “This holistic design is raising the bar for lifetime income solutions.”

Related: Retirement pros must prioritize automatic income in retirement: Nationwide

T. Rowe Price’s latest 401(k) client data shows a growing trend of plan participants maintaining their assets in-plan after retirement, with 52% aged 60 and older staying in-plan for at least four years after separating from service. The latest white paper from the firm further explores this trend.

Negrón from T. Rowe Price adds, “Our goal is to consistently stay at the forefront of our clients’ needs. We aim to simplify the transition into retirement and to offer solutions that can give retirees the financial confidence and peace-of-mind in this new phase of life.”