As awareness grows for the importance of income in retirement, in-plan guarantees are growing in number and in assets. In-plan annuity guarantees allow participants in retirement plans to protect some of their savings to provide future retirement income while they are still working and contributing to their plans.
A LIMRA Secure Retirement InstituteTM (SRI) survey of in-plan guarantee availability and election found that in 2013 the total assets covered by an in-plan guarantee grew 31 percent since 2012 to reach $2.9 billion. The number of plans offering in-plan guarantees increased to 23,500 a 10 percent gain over the year before.
Eight out of 10 U.S. workers believe that employers should provide ways to convert savings into retirement income according to LIMRA SRI research. Younger workers are particularly interested in this option. Ninety percent of workers age 18-34 said they somewhat or strongly agree that employers should provide avenues to convert savings into income at retirement.
The number of workers who have access to in-plan guarantees as part of their retirement plans grew to nearly 2.3 million, an increase of 28 percent compared to 2012. The total number of workers who elected an in-plan guarantee is much smaller at 49,900, an increase of 5 percent in 2013.
Guaranteed lifetime withdrawal benefit (GLWB) and deferred income annuities (DIA) are the two types of in-plan guarantees that are currently sold in retirement plans.
Researchers from LIMRA SRI polled consumers about various financial topics and found that 4 in 10 were interested in learning more about how to generate retirement income. Because no one knows how many years they will live in retirement, in-plan guarantees can be an effective way to create an income stream and mitigate financial issues that can affect a long retirement.