US pension provider TIAA-CREF is considering a move into the UK market, Money Marketing understands.
The financial services firm offers retirement products, savings plans, mutual funds and life insurance, as well as advice offerings in the US.
It is understood to be looking at launching a UK-based business.
TIAA-CREF was cited in the Department for Work and Pensions’ paper, Reinvigorating Workplace Pensions, published last month.
The policy paper sets out a number of possible models for ‘defined ambition’ occupational schemes, which were first mooted by pension minister Steve Webb in April.
In July, Webb urged providers to develop pension products with “affordable” guarantees. The minister wants to encourage employers to share some of the risks and uncertainties of retirement with their employees.
The DWP says one of TIAA-CREF’s leading products is the ‘traditional annuity’, a guaranteed annuity product offered to participants in employer-sponsored schemes.
During the accumulation phase, the employee can purchase pension income using some of their accumulated fund. This income is guaranteed at a minimum rate.
In the decumulation phase, individuals take their guaranteed minimum income plus any additional amounts owed due to strong investment returns.
A further uplift to retirement income may come from the reserves held back during the accumulation phase for the guarantees. These are distributed by TIAA-CREF as additional annuity income as the need for reserves declines.
TIAA-CREF currently provides retirement plans at more than 15,000 colleges, universities, schools, research centers, medical organisations and other non-profit institutions in the US.
The firm declined to comment on whether it is planning to launch a UK arm.
Worlwide Financial Planning IFA Nick McBreen (pictured) says: “The problem is providers cannot afford to fund guarantees and when I hear of a new entrant coming to take the UK market by storm I have to say, we have heard it all before.”