U.S. financial services companies have been spending heavily on efforts to get employers interested in adding lifetime income options to 401(k) plans and other defined contribution retirement plans.
New survey results from the Transamerica Center for Retirement Studies suggest that employers may not be paying much attention.
The center’s latest employer survey report, which is based on a survey of 1,825 U.S. employers that was conducted in late 2018, shows that only about 17% said they “offer an income annuity as a payout option.”
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That 17% annuitization offer rate is unchanged from the annuitization option offer rates the center found when it conducted similar surveys in 2017 and 2018.
The popularity of some education options could be increasing.
In response to the latest survey, 46% of the employer participants said they offer “education about transitioning into retirement” or “seminars about transitioning into retirement.”
That’s up from a combined total of 37% for those two options a year earlier.
The center also included an employer realism measure: a comparison of the percentage of employer participants that say certain benefits are important with the percentage that actually offer the benefits.
In the latest survey report, for example, 65% of the employers say offering disability insurance is important, and just 40% offer it, implying a 25 percentage-point gap between what employers say and what they do.
About 67% of the employers participating in the year-earlier survey said disability insurance is important, and 43% said they offered disability insurance, implying a 24 percentage-point realism gap.
The realism gap for employer-sponsored life insurance narrowed to 11 percentage points in the latest survey, from 15 percentage points in the year-earlier survey.
A link to the new Transamerica employer survey report is available here.
— Read Lack of 401(k) Annuitization Portability Is Mean: Pension Policy Specialists, on ThinkAdvisor.