AB Assumes Fiduciary Responsibility for Annuity Selection in DC Plans as Part of Its Lifetime Income Strategy Service

Nov 04, 2015, 08:30 ET from AllianceBernstein L.P.

NEW YORK, Nov. 4, 2015 /PRNewswire/ -- AllianceBernstein L.P. ("AB"), a leading global investment management firm, today announced that it has formed a fiduciary service that will assume fiduciary responsibility for annuity selection in connection with its Lifetime Income Strategy service. As the party responsible for annuity selection, AB will perform these duties as an investment manager under Section 3(38) of the Employee Retirement Income Security Act (ERISA). AB's new service is intended to alleviate the burden and risk associated with a plan fiduciary's responsibility as it relates to the inclusion of guaranteed income options so that plan sponsors can feel more confident in offering lifetime income solutions to employees.

"We think it is clear that policymakers and regulators have initiatives underway to encourage plan sponsor adoption of guaranteed income solutions," said Richard Davies, Senior Managing Director, Defined Contribution at AB. "With our new fiduciary service, a plan sponsor can delegate responsibility to AB for its insurance product selection. This should make plan sponsors feel more comfortable in offering employees guaranteed income in retirement."

AB, a longstanding leader in the field with more than $35B in customized target-date solutions, was ranked #1 by Pensions & Investments in its 2015 survey of large custom plan managers. Its Lifetime Income Strategy is a natural extension of its customized target-date expertise and provides participants with a personalized asset allocation strategy that helps build critical retirement savings, followed by guaranteed income for life. Guaranteed income through the Lifetime Income Strategy is provided by multiple insurers through a technology platform established by AB to operate as an insurer marketplace. This marketplace is a core element of AB's fiduciary service as it helps to ensure that guaranteed income is fairly priced. AB's multi-insurer approach also helps address sponsor concerns around sustainability as insurers participating in the marketplace can change over time without reducing the ability to generate guaranteed income for current and future plan participants.  

"We understand employees desire secure retirement income options from their workplace savings plan, but unfortunately many plan sponsors are concerned about taking on the fiduciary responsibility associated with offering these options within their plans," said William Marshall, Managing Director, Defined Contribution at AB. "With our new fiduciary service, we've put together a robust process for the selection and monitoring of insurers as well as the prudent assessment of the value of guaranteed income offered. AB has assembled a team of AB's most senior professionals to oversee this fiduciary service with expertise in insurance, credit analysis, risk and compliance, asset allocation, technology and regulatory affairs so plan sponsors can be confident in the transfer of fiduciary responsibility."

To learn more about the AB's defined contribution solutions, go to www.abdc.com.

About AB's Multi-Asset Solutions Group
AB's Multi-Asset Solutions Group is a dedicated team of more than 25 investment professionals that utilizes its deep capital markets expertise, research insights and a full range of risk/return sources as building blocks to create integrated multi-asset investment solutions tailored to the needs of each client. These include glide path strategies like target-date and lifetime income solutions for defined contribution plans, asset allocation strategies and solutions targeting unique market index and factor exposures.

About AB
AB is a leading global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private wealth clients in major world markets.

As of September 30, 2015, AB Holding owned approximately 36.2% of the issued and outstanding AB Units and AXA, one of the largest global financial services organizations, owned an approximate 63.4% economic interest in AB.

Additional information about AB may be found on our website, www.abglobal.com.

SOURCE AllianceBernstein L.P.