The Capital Group, home of American Funds, has joined efforts with Shlomo Benartzi’s PensionPlus to make it easy for retirement plan participants to create a highly personalized paycheck in retirement designed to last through their lifetime.
According to the firms’ Aug. 21 announcement, the joint pilot program will be offered as a value add for the Capital Group's target date clients and will be offered to select retirement plan participants.
Co-founded in 2021 by renowned behavioral economist Shlomo Benartzi—known for his research on retirement savings and innovations like Save More Tomorrow that he developed with Richard Thaler—PensionPlus was designed to help create a lifelong retirement paycheck that takes into account the unique differences in priorities as people age, while also ensuring that participants remain in control of their assets.
As Benartzi notes, PensionPlus is a “first-of-its-kind solution” that incorporates a variety of behavioral insights not considered by more traditional retirement income projections. In addition to helping set a personalized retirement income plan, PensionPlus helps users stay on track with behaviorally informed digital nudges.
“PensionPlus democratizes retirement income planning for all participants,” explains Professor Emeritus Benartzi. “In about 10 minutes, participants are able to create a highly customized and sustainable retirement paycheck that reflects their needs, goals and preferences. And we're not a once-and-done calculator. After the retiree begins receiving their paycheck, we continually monitor their plan, adjusting their paycheck for inflation and nudging them to stay on track. Our simple goal is to give retirees the peace of mind they deserve with a paycheck they can count on,” he says.
“As an established retirement income investment manager, implementing PensionPlus through this pilot aligns to our long-term goal of expanding coverage of workplace retirement plans and delivering solutions to help create better participant outcomes,” adds Brendan Mahoney, Head of Institutional Retirement Strategic Growth at Capital Group. “We look forward to implementing the service to help advisors scale their business and work with their plan sponsor clients to support participants in achieving their retirement goals.”
Earlier this year, it was announced that OneAmerica would become the first retirement plan provider to offer PensionPlus. According to OneAmerica, advisors who participated in beta versions of PensionPlus appreciated the value that the service brings to their customer relationships. At the same time, plan sponsors in the pilot embraced the effectiveness of the new service in helping participants understand the impact of important decisions like whether to delay Social Security for higher benefits or how to factor a family inheritance into their retirement income plan.
For more information, visit www.pensionplus.com.
