A new survey from TIAA points to a rising tide in demand for lifetime income products within DC plans, though a lack of understanding among employers could slow the wave.
The survey, conducted by Greenwald Research, draws on insights gleaned from 500 C-suite decision-makers managing 401(k), 403(b), and 457 plans.
According to the inaugural survey report of DC plan sponsors, titled “Building a Better Retirement 2024,” 76 percent anticipate growing interest in annuities over the next five years, echoing the rise of target-date portfolios in retirement plans after policymakers set the stage for them to become the default option. Among sponsors who do not currently offer an annuity, more than 40 percent say they plan to introduce one within two years.
But even though the interest for lifetime income solutions is real, the report points to a lack of “annuity fluency” as a potential challenge, with only 37 percent of respondents feeling confident in explaining the value and importance of these products.
