MetLife has struck a partnership with Fidelity Investments to introduce the MetLife Guaranteed Income Programme.
The new offering is a fixed immediate income annuity, aimed at providing retirees with a stable source of income.
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It will be available through Fidelity’s Guaranteed Income Direct, a retirement income solution.
This alliance aims to broaden access to immediate income annuities, enabling plan sponsors to incorporate retirement income options within their defined contribution plans.
MetLife’s solution allows participants across various savings levels to purchase an immediate income annuity through an insurer chosen by their employer.
They can annuitise any portion of their savings, with the remainder staying within the plan.
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By GlobalDataThis flexibility supports employees in tailoring their retirement income according to their individual needs.
Research conducted by MetLife has revealed that 71% of US employees worry about outliving their retirement savings, a surge from 60% two years prior.
Another study by MetLife highlighted that one-in-three retirees (34%) who opted for a lump sum from their defined contribution plan had exhausted their funds within an average of five years.
The Guaranteed Income Programme offers a solution by providing a guaranteed income stream through an employer, helping plan participants establish a more financially secure retirement.
In contrast, retirees who take lump-sum payments instead of annuitising face the risk of depleting their savings prematurely, potentially leaving them reliant on Social Security as their sole income source.
MetLife senior vice-president and head of annuities Melissa Moore said: “At MetLife, we believe simplicity should be the guiding principle when offering income annuities, and this solution makes it simple for plan sponsors to offer guaranteed income and simple for plan participants to annuitise their savings.
“Having a guaranteed stream of income can help retirees budget for their day-to-day expenses and protect against depleting their savings too quickly.”
In the fourth quarter of 2023, MetLife registered a net income of $574m.
This represents a 63% decrease from $1.5bn in the same quarter of 2022.
The decline was driven by market risk benefit remeasurement losses that outweighed an increase in net derivative gains.
