Fidelity Platform Ties 401(k)s to Annuities

Fidelity Investments has introduced an open architecture annuity platform that an executive said should help the Boston investment company retain assets after 401(k) customers retire.

The platform, Fidelity Life Income Solutions, lets people who are leaving a 401(k) plan buy fixed or variable annuities in order to establish an income stream for retirement. Fidelity will offer both proprietary and nonproprietary annuities to customers interested in rolling their 401(k) assets into a product that guarantees retirement income.

Though Fidelity has long offered annuities, coupling them with 401(k) plans is new at the Boston fund giant. Fidelity manages more than $1.3 trillion of assets and has $2.7 trillion under custody.

Steve Deschenes, an executive vice president at Fidelity Investments Life Insurance, said it will offer its annuities along with products from the insurers Principal and the John Hancock unit of Manulife Financial. The company has agreements with two other annuity providers, he said, and plans announcements about platform enhancements this year.

“We want to maintain a long-term relationship with our 401(k) participants,” he said, “and this is part of a broad suite of services that we are using in order to insure that this occurs.”

Retaining customers after they retire is a top priority at Fidelity. Deschenes said that, in the past couple of years, Fidelity has launched Fidelity Retirement Income Services and Fidelity Retirement Income Management Account as products to receive customers’ 401(k) rollovers.

This is the first time, however, that Fidelity is marketing annuities for plan sponsors to offer participants, he said.