Despite the perceived advantages of guaranteed income products as an option in employer-sponsored defined contribution plans, awareness about the products among plans participants remains low, according to a new report.
Prudential Financial Inc., Newark, N.J., published this finding in a white paper based on two Prudential research studies: the Prudential Retirement Plan Participant Survey; and the Book of Business Analysis. The first, conducted in December 2011, polled 2,300 defined contribution plan participants about their view of in-plan guaranteed income options.
The second study, conducted in mid-2011, examined plan participant outcomes based on their investment in an-plan guaranteed retirement option. Analyzing more than 20,000 DC plan participants, the study explored how market volatility affected the behavior of individuals who invested in a Prudential Retirement in-plan guaranteed retirement income option and those who did not.
Nearly half (46%) of eligible plan participants who have not invested in an in-plan guaranteed retirement income options say they are not aware that one is available, the white paper reveals.
Once informed of these options through the Prudential research survey, nearly half say they are likely to consider enrolling within the next year. And nearly three out of four say that a guaranteed lifetime retirement income would make them more confident about staying invested in stocks and bonds during periods of market volatility.