Pimco has a marketing deal with MetLife under which the two firms' wholesalers are educating advisors about how their retirement income offerings complement each other.
The collaboration spotlights Pimco's inflation-adjusted mutual funds, dubbed Real Income Funds, and MetLife's longevity insurance.
Pimco and MetLife are telling advisors that a client can buy Pimco's Real Income Funds, which seeks to provide monthly distributions for a specified term, and separately buy MetLife longevity insurance to provide monthly lifetime income after mutual fund distributons end.
"We've had a great relationship and a strong partnership with Pimco," MetLife spokesperson Jessica Ong told The MFWire.com. "It was a fit."
MetLife embarked on the collaboration to "show advisors they can offer their clients this wholistic solution that meets their needs," she added.
Company Press Release
MetLife and PIMCO Collaborate to Provide Financial Advisors with Unique Retirement Income Solution
MetLife's Longevity Income Guarantee Complements PIMCO's Real Income Funds to Provide Income Payments for Life
NEW YORK--MetLife, Inc. (NYSE: MET), a leading global provider of insurance, employee benefits and financial services, and PIMCO, a global investment solutions provider, announced today an innovative marketing collaboration intended to educate advisors about a unique retirement income solution that combines investment and insurance products to help meet income planning needs over the course of a client's retirement years.
Financial advisors today are challenged to solve two key risks that their clients may face during retirement: losing the purchasing power of income payments due to inflation and running out of money. To address these concerns, advisors can now offer clients a retirement income solution that uses two separate products in a complementary way. A client can purchase PIMCO mutual funds designed to provide systematic real (inflation-adjusted) monthly distributions to help protect against inflation risk, and separately purchase MetLife longevity insurance to provide monthly lifetime income after mutual fund distributions end.
"Inflation is a significant risk for retirees, and the PIMCO Real Income Funds are specifically designed to provide systematic monthly distributions for a specified term, while seeking to preserve retirees' purchasing power," said Tom Streiff, Executive Vice President, PIMCO Retirement Product Manager. "Should they reach the end of these distributions, clients still need a retirement income stream that lasts for their rest of their lives."
"Longevity insurance can protect retirees from the risk of outliving their assets while in retirement by providing guaranteed future lifetime income” said Elizabeth M. Forget, senior vice president, Retirement Products, MetLife. "By including MetLife’s Longevity Income Guarantee in a client's overall retirement income strategy, a client can secure a guaranteed stream of lifetime income – typically beginning between ages 75-85 – when other assets may be running low."
For example, a client entering retirement could invest a portion of his or her retirement savings in the PIMCO Real Income 2019 or 2029 Fund -- both liquid, open-end mutual funds investing primarily in U.S. Treasury Inflation-Protected Securities (TIPS) and designed to provide a systematic income stream of inflation-adjusted distributions for a defined period. The client can then also purchase separately the MetLife Longevity Income Guarantee (LIG), a deferred income annuity, also known as longevity insurance, designed to help a client maximize, protect and guarantee income later in his or her retirement years. MetLife was the first to market with its longevity insurance product in 2004.
The PIMCO inflation-adjusted mutual funds seek to continually maintain purchasing power during the applicable and defined distribution period. The fund distributions are made monthly until all assets have been distributed, either by October 2019 or October 2029 and depending on the fund selected by the client. The MetLife LIG can then generate income later in life, at a time when all assets from the PIMCO funds have been distributed. Clients can begin to take income from an LIG contract after a minimum two-year waiting period, starting any time between age 50 to 85.
MetLife LIG and the PIMCO Real Income Funds provide advisors with the tools to offer their clients a holistic retirement income solution.
MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers in over 60 countries. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia Pacific, Europe and the Middle East. For more information, visit www.metlife.com.
PIMCO is a leading global investment management firm, with offices in 10 countries throughout North America, Europe and Asia. Founded in 1971, PIMCO offers a wide range of innovative solutions to help millions of investors worldwide meet their needs. PIMCO’s goal is to provide attractive returns while maintaining a strong culture of risk management and long-term discipline.
About PIMCO Real Income Funds
The PIMCO Real Income Funds are registered mutual funds. Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund’s prospectus and summary prospectus, if available, which may be obtained by visiting www.pimco-funds.com. Please read them carefully before you invest or send money. Fund distributions are not guaranteed and are made until their stated maturity dates rather than for life. During periods of rising inflation the amount of the monthly distribution by the Funds is expected to increase and during periods of deflation the amount of the monthly distribution is expected to decrease. The monthly distribution amount may be adjusted during the term of a Fund to better enable the Fund to provide regular monthly distributions through the final maturity date.