The report, “Guaranteed Annuities in Defined Contribution Plans: Current Products and Future Prospects,” reveals key trends that will determine the evolution and success of annuities in DC plans, provides in-depth product profiles for current plan offerings for Genworth ClearCourse, Hartford Lifetime Income, MetLife Personal Pension Builder, and Prudential IncomeFlex, and defines four steps manufacturers should take to overcome adoption challenges, FRC said.
Luis Fleites, Vice President and Director of Retirement Markets at FRC said the first step to facilitating a more widespread acceptance of annuities within 401(k) products is to amend the negative perception of annuities through communication and education at the platform level. The communication needs to be adapted so participants are aware that they are purchasing an income option, Fleites said in a press release.
The report findings indicate that these communication and educational strategies vary from firm to firm and provide examples.
FRC said it expects to see strategies evolve as manufacturers and recordkeepers identify successful marketing strategies for both plan sponsors and participants. Now that a framework for these products has been established, new entrants in the marketplace should be able to capitalize on the progress already achieved, FRC said.
The company also said it expects the emergence of guaranteed retirement income as an asset class within plan offerings.
For more information on the FRC research report, contact Trisha Langlois at FRC at (617) 824-1204 or via e-mail at Trisha.Langlois@frcnet.com.