Community Bank System, Inc. CBU

The recordkeeping powerhouse joins a consortium of industry leaders to deliver lifetime income through innovative target date series

SCOTTSDALE, Ariz., Nov. 9, 2023 /PRNewswire/ -- ARS (previously Annexus Retirement Solutions) announced today that Transamerica is adding the State Street GTC Retirement Income Builder (the Series) to its recordkeeping platform, joining State Street Global Advisors, Global Trust Company (GTC) and ARS in helping more Americans become retirement ready. This new industry innovation in target date funds provides lifetime income, while preserving growth opportunity and participant control of the assets.

Transamerica is dedicated to helping participants secure their financial futures and believes in-plan income solutions can be one of the most critical components to helping solve today's retirement income crisis. It is estimated that half of U.S. retirees are at risk of being unable to maintain their pre-retirement standard of living, based on current savings levels.¹ In addition to lack of savings, life expectancies are rising, and many investors do not have the expertise or guidance needed to create a plan to make their savings last throughout retirement.

"Transamerica is keenly focused on delivering solutions that can help participants better prepare for retirement," said Phil Eckman, president of Transamerica Workplace Solutions. "By adding this target date series as an option for plan sponsors and their participants, we deliver a much-needed investment option that is designed to generate both growth and lifetime income, not one over the other."

The Series combines State Street Global Advisors' cost-efficient asset management expertise, Transamerica Life Insurance Company's industry leading stable value products with ARS' patent-pending lifetime income solution, Lifetime Income Builder.² The solution, which launched earlier this year, is embedded directly within the target date fund's glidepath as a separate asset class, which helps promote growth opportunity and permits liquidity and portability. The Series is designed to be used as a qualified default investment alternative (QDIA).

"Transamerica has always had a progressive approach to delivering new solutions and is a natural partner to offer this investment," said Dave Paulsen, chief distribution officer at ARS. "Historically, lifetime income solutions require a tradeoff of growth opportunity or liquidity, but we've removed those tradeoffs within this product design."

One important component of the product design is the simplicity on the participant level. "We recognized that the industry was still asking participants to make decisions on solutions they didn't understand," said Paulsen. "By embedding lifetime income at the fiduciary investment management level, we eliminated those difficult decision points for the participant, while delivering the benefits they want."

The Series helps mitigate sequence of return risk by capturing quarterly high-water marks³ on the full account value and utilizing the Transamerica Stable Value offering for those near and in retirement—helping protect participants' savings and providing lifetime income. The fund targets a 6% annual income rate⁴ at income activation, calculated using the highest captured high-water mark of the fund. The inclusion of Transamerica's stable value product provides participants the benefit of a principally protected investment while reducing their total expected return volatility over time. Just like other target date funds, the investment does not require participant-level decisions, making it simple and easy for a participant to invest and to receive lifetime income.

"We have a strong relationship with Transamerica already and are thrilled to expand our partnership with this new solution, helping more Americans retire with lifetime income," said Bob McGowan, managing director and head of the Financial Institutions Group at State Street Global Advisors.

Transamerica is the most recent top-rated recordkeeper to add the Series to its platform, and the investment will be available across multiple recordkeeping platforms in the coming months. Participants who choose to keep their assets in-plan and under Transamerica's administration will gain greater long-term value by benefiting from institutional pricing all the way through retirement.

About Transamerica 

With a history that dates back more than 100 years, Transamerica is a leading provider of life insurance, retirement, and investment solutions, serving millions of customers throughout the United States. Transamerica's dedicated professionals focus on helping people live their best lives through saving, investing, and protecting their loved ones. Transamerica is dedicated to building America's leading middle market life insurance and retirement company, with unique access to the large and growing middle market consumer via World Financial Group and US retirement recordkeeping. Transamerica provides a broad range of quality individual life insurance policies, workplace supplemental insurance benefits, workplace retirement plans, individual retirement accounts, and investment products including mutual funds, annuities, stable value solutions, as well as investment management services. 
 
In 2022, Transamerica fulfilled its promises to customers, paying more than $46 billion in insurance, retirement, and annuity claims and benefits, including return of annuity premiums paid by the customer. Transamerica's head office is in Baltimore, Maryland, with other major operations in Cedar Rapids, Iowa, and Denver, Colorado. Transamerica is part of the Aegon group of companies. Each Aegon company is solely responsible for its own financial conditions and contractual obligations. Based in the Netherlands, Aegon is an international financial services holding company. 

About State Street Global Advisors

For four decades, State Street Global Advisors has served the world's governments, institutions and financial advisors. With a rigorous, risk-aware approach built on research, analysis and market-tested experience, we build from a breadth of index and active strategies to create cost-effective solutions. And, as pioneers in index, ETF, and ESG investing, we are always inventing new ways to invest. As a result, we have become the world's fourth-largest asset manager⁵ with US $3.8 trillion⁶ under our care.

About Global Trust Company

GTC (Global Trust Company, Inc.) is a State of Maine chartered non-depository trust company providing fiduciary and trustee services for some of the largest and most complex institutional asset managers and asset owners. Founded in 2008 as a subsidiary of Northeast Retirement Services (NRS), we currently manage, as of September 30, 2023, $103 billion across 80 trusts and over 300 funds. GTC is a leader in the design and implementation of proprietary collective investment trusts (CITs) and has demonstrated a continued willingness and ability to launch complex fund structures for the benefit of our partners and institutional investors. NRS and GTC are part of the BPAS Trust Services group, a wholly-owned subsidiary of Community Bank System, Inc. (CBS, NYSE: CBU).

About ARS

ARS (previously Annexus Retirement Solutions) designs, develops, and facilitates distribution of institutional lifetime income products that help Americans solve their biggest challenge in retirement—outliving their money. Founded in 2020 by the leaders of Annexus Group, the company's over-arching philosophy centers on delivering better participant outcomes through innovation. It is led by industry veterans with a combined 175 years of experience in retirement plans, annuities, and asset management. ARS is headquartered in Scottsdale, Arizona. Learn more about ARS at www.annexusretirementsolutions.com.

¹Center for Retirement Research at Boston College, THE NATIONAL RETIREMENT RISK INDEX: AN UPDATE FROM THE 2019 SCF, January 2021.

²Lifetime Income Builder is a group fixed indexed annuity with a guaranteed lifetime withdrawal benefit (a "FIA"). The withdrawal benefit is subject to the claims paying ability of the insurers and insurers do not guarantee that participants will receive lifetime income.

³The value of the target date fund account is measured on the last business day of each calendar quarter and the last business day of the month prior to income activation, and then the highest measured value is locked in. The high-water mark is not measured until the fund begins to allocate to the fixed indexed annuity.

⁴6% is a targeted percentage and there is no assurance that the funds will be able to make payments that meet the targeted percentage. Actual percentage may vary. See detailed disclaimers at the end of this press release regarding actual percentage.

⁵Pensions & Investments Research Center, as of 12/31/22.

⁶This figure is presented as of June 30, 2023 and includes approximately $63 billion USD of assets with respect to SPDR products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated. Please note all AUM is unaudited.

Important Risk Information:

Investing involves risk including the risk of loss of principal. Such activities may not be suitable for everyone.

Each target date fund (TDF) in the Series is established by Global Trust Company and held in the GTC Retirement Income Builder Collective Investment Trust (the "Trust"). The Trust is a bank-sponsored collective investment trust and not a mutual fund. Global Trust Company serves as trustee of the Trust, manages the Trust, and has ultimate investment authority for each fund in the Series. State Street Global Advisors manages a portion of the solution's underlying assets and provides Global Trust Company with glidepath recommendations for the funds within the Series.

Lifetime Income Builder is a group fixed indexed annuity with a guaranteed lifetime withdrawal benefit (a "FIA"). Each TDF may invest in more than one FIA, collectively which are referred to as "Lifetime Income Builder." Annexus Retirement Solutions is the inventor of Lifetime Income Builder. The FIA guarantees are made to the TDF, not to the participants. Participants are not beneficiaries of any annuity contract. Lifetime Income Builder is not provided by or guaranteed by Global Trust Company, State Street Global Advisors, Annexus Retirement Solutions or any of their affiliates.

Each TDF is designed to provide participants target annual income of 6% at income activation and a target minimum lifetime income percentage of 4.5%. The target percentages are goals and there is no assurance that the funds will be able to make payments that meet either target percentage. All income payments to participants, regardless of the percentage, are always dependent on the trustee.

The TDFs invest in FIAs that are intended to back the Trust's investment objective, lifetime income. Each FIA is issued by an insurance company to the trustee. The FIAs provide guaranteed payments to the Trust and are subject to the claims-paying ability of the issuing insurance companies. If the value of the other investments in the fund reaches zero at or after income activation, income payments are adjusted to the cumulative guaranteed percentage provided to the Trust by the FIAs, which is targeted to be the target minimum lifetime income percentage of 4.5%. The actual annual income percentage and actual minimum lifetime income percentage are dependent on economic factors and may be more or less than what is targeted. There are possible, but extreme, market conditions where the FIAs' cumulative guaranteed percentage that is provided to the Trust could be less than 4.5%. Therefore, we use the term "target minimum lifetime income percentage" to properly reflect the potential for such scenario. In that scenario, the FIAs would still provide guaranteed payments to the Trust, but it would be something less than the targeted minimum of 4.5%, and payment of income to the participants would remain dependent on the trustee.

If a participant selects the joint income option offered by the TDF, the actual payment percentages will be less than 6% and 4.5%, but instead of income payments terminating upon the death of the participant, income payments will continue to be made to the joint beneficiary if the joint beneficiary outlives the participant.

Current target annual income and target minimum lifetime income percentages reflect economic conditions at the time each TDF is created. Future TDFs in the Series could have lower or higher targeted percentages based on economic conditions at the time of the TDF's creation. Please refer to the Offering Memorandum for more information on the risks of not receiving income payments.

The TDFs are designed for investors expected to retire around the year indicated in each TDF's name. When choosing whether to invest in the TDF for which an investor age qualifies, investors should consider whether they anticipate retiring significantly earlier or later than age 65 even if such investors retire on or near a TDF's target date. There may be other considerations relevant to determining whether investment in the TDF best meets their individual circumstances and investment goals. The TDF's asset allocation strategy becomes increasingly conservative as it approaches the target date and beyond. The investment risks of each TDF change over time as its asset allocation changes.

An investment in a TDF is not a bank deposit and is not insured or guaranteed by the insurance companies, the trustee, State Street Global Advisors, the Federal Deposit Insurance Corporation ("FDIC"), or any other government agency. The Trust is not insured by the FDIC and is not registered with the Securities and Exchange Commission.

Each FIA is issued by an insurance company to the trustee. The FIAs do not create any third-party beneficiary relationships or third-party beneficiary rights for any other person or entity. The insurers do not guarantee that participants will receive lifetime income.

The information provided herein does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security or a product, or a recommendation of the suitability of any investment strategy for a particular investor. It does not take into account any investor's particular objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.

The entities referenced above have collaborated together to bring this solution to market; none of the collaborating listed entities are affiliated entities.

© 2023 State Street Corporation – All Rights Reserved.

 6011641.1.1.AM.RTL

Exp. Date: 9/30/2024

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SOURCE Annexus Retirement Solutions