Pacific Life and Franklin Templeton Announce Defined Contribution Lifetime Income Solution

NEWPORT BEACH, Calif. & SAN MATEO, Calif.--(BUSINESS WIRE)-- A resounding majority (87 percent) of U.S. workers would welcome access to a guaranteed lifetime income stream as an employment benefit, according to the 2024 Voice of the American Workplace study conducted on behalf of Franklin Templeton by The Harris Poll. Today, Pacific Life and Franklin Templeton are announcing a strategic partnership to make this desire a reality, marking a significant milestone in their multi-year collaboration.

Together, the two firms are evolving the way lifetime income is delivered in defined contribution plans, by bringing together Pacific Life's Income Horizon™ and Franklin Templeton's Goals Optimization Engine (GOE®) to form a unique personalized income approach structured within Collective Investment Trusts (CITs) for simplified implementation. The resulting lifetime income framework allows defined contribution plan participants to seamlessly convert a portion of their accumulated retirement savings into a guaranteed income stream for life, right inside their existing plan. The solution combines personalized asset allocation advice provided by Franklin Templeton that includes allocations to lifetime income secured by Pacific Life to extend into a complete decumulation strategy.

“This partnership underscores a shared commitment to retirement income security, with a focus on innovation and customization to meet the evolving needs of plan sponsors and their participants,” said Brian Woolfolk, executive vice president and head of institutional business at Pacific Life. “Our collaborative approach addresses a number of key concerns that participants have expressed in research studies.”

Pacific Life recently released Decoding Retirement, a study highlighting a variety of factors influencing retirement outcomes for participants. Notably, 58 percent of respondents preferred incremental lifetime income purchases over time versus a larger purchase at retirement. “The design of Income Horizon aligns with this preference for incremental purchases over time. And, when integrated with GOE, creates a simple, holistic, and personalized approach to securing lifetime income in retirement for plan participants. This innovative solution built with Franklin Templeton is a significant advancement over the traditional one-size-fits-all approach,” added Woolfolk.

Plan participants approaching retirement have a widely divergent set of relevant characteristics, such as varying tenures, balances, savings rates, continued usage of target-date funds, access to traditional pension plans, marital status, desired retirement ages and preferences regarding spending in retirement.

“The new framework that Franklin Templeton and Pacific Life have collaborated to develop addresses these crucial differences and integrates the broad array of participant data that plan sponsors have access to—building on modern approaches to data and machine learning—to personalize recommendations,” said Yaqub Ahmed, co-head of retirement, insurance, and 529 distribution at Franklin Templeton.

By accessing a guaranteed income solution within a defined contribution plan, participants benefit from a number of crucial advantages, including competitive group/scale pricing, fiduciary oversight, professional management, dollar-cost averaging, and portability.

For plan sponsors, this holistic solution helps address key considerations, such as scaled costs and ease of implementation. Once a plan sponsor adopts the solution, there is an efficient path to making it available to plan participants to secure a personalized retirement income plan to meet their future needs.

“We believe every U.S. worker and household has the right to experience financial well-being throughout each phase of life,” added Ahmed. “Our continued investment in strategic partnerships and product development is meant to ensure we are bringing a breadth of solutions to market to meet the various needs and preferences of plan sponsors and their participants. We are committed to creating transformative changes, through new solutions such as this one with Pacific Life, and early indications are there is a lot of interest on behalf of plan sponsors for what we are bringing to market.”

Pacific Life’s deep experience in pension risk transfer and retirement income, and Franklin Templeton’s 75+ year history of asset management, bring together financial strength and stability. Their collaboration aims to address existing gaps in the market with a personalized, simple, and flexible approach to asset allocation, insured income, and participant engagement.

For more information, please contact: Michael Oler at Michael.Oler@PacificLife.com or Ahmet Kamil at Ahmet.Kamil@PacificLife.com.

About Pacific Life:

Pacific Life provides a variety of products and services designed to help individuals and businesses in the retail, institutional, workforce benefits, and reinsurance markets achieve financial security. Whether your goal is to protect loved ones or grow your assets for retirement, Pacific Life offers innovative life insurance and annuity solutions, as well as mutual funds, that provide value and financial security for current and future generations. Supporting our policyholders for more than 150 years, Pacific Life is a Fortune 500 company headquartered in Newport Beach, California. For additional company information, including current financial strength ratings, visit www.PacificLife.com.

Pacific Life’s Income Horizon™ is a group deferred income annuity. Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products can be issued in all states, except New York, by Pacific Life Insurance Company or Pacific Life & Annuity Company. In New York, insurance products are only issued by Pacific Life & Annuity Company. Product availability and features may vary by state. Product and features are subject to regulatory approval. Each insurance company is solely responsible for the financial obligations accruing under the products it issues.

All guarantees are subject to the claims-paying ability and financial strength of the issuing insurance company.

About Franklin Templeton:

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.6 trillion in assets under management as of June 30, 2024. For more information, please visit franklintempleton.com and follow us on LinkedIn, X and Facebook.

Franklin Templeton’s Goals Optimization Engine (GOE®) recommends a portfolio for each goal an investor has, actively adjusts the asset mix over time, seeking to maximize the likelihood of achieving retirement goals. There can be no guarantee goals will be achieved. Investment allocation generated by GOE® is based on information provided and may be limited to the investment options available in the defined contribution plan. GOE® is owned and managed by Franklin Advisers, Inc.

©2024 Franklin Distributors, LLC.

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Pacific Life

Jesse Page

(949) 219-4575

jpage@pacificlife.com

Franklin Templeton

Rebecca Radosevich

(212) 632-3207

rebecca.radosevich@franklintempleton.com

Source: Pacific Life