More plan participants—nearly eight in 10—intend to rely on their workplace defined contribution (DC) plan as a source of retirement income than any other source, including Social Security, research from Prudential Retirement finds.

The number who cite their plan as a primary source of retirement income exceeds by 33% the number who cite Social Security. Yet, only 4% of DC plans offer their participants a guaranteed lifetime income solution. Only 45% of DC plan participants surveyed say they are highly satisfied with their plan’s help with securing an adequate income source once they retire.

Sri Reddy, head of Full Service Investments at Prudential Retirement in Hartford, Connecticut, tells PLANSPONSOR, there is more plan sponsors can do. “They can offer guaranteed lifetime income solutions. For years this has been an acceptable qualified default investment alternative,” he notes. Fifty-four percent of participants surveyed say they believe guaranteed lifetime options offered as a default investment option would provide better-than-average retirement outcomes.

“Plan sponsors say don’t see a lot of participants asking for lifetime income, but the awareness is not there for participants,” Reddy continues. “The survey is telling plan sponsors if participants knew guaranteed lifetime income is an alternative for plan design, they would have asked for it.”

Only about one-third of participants surveyed are familiar with lifetime income solutions, and only 5% can confirm they use them. However, among Millennials, 55% are familiar with these solutions and 17% say they have had experience with them.

Thirty-two percent of all participants consider guaranteed lifetime income solutions very important, but the figure jumps to 78% when participants are familiar with them. Asked why they value these solutions, participants most commonly say they provide financial security, certainty or predictability; are easy to understand and manage; and help people save and prepare for retirement.

“Other studies we’ve done show that people with guaranteed lifetime income solutions save more. It ensures them that they are managing risk over time,” Reddy says.

NEXT: Rethinking auto solutions

When defined benefit (DB) retirement plans were the primary retirement savings vehicle, all employees were automatically placed into them, and the plan sponsor invested their accounts for them. However, DC plan sponsors often fear participant backlash due to loss of control if they use automatic plan features.

In its research report, “The Ease of Automation and Guaranteed Lifetime Income,” Prudential Retirement suggests plan sponsors reframe the default debate to counter the common perception that auto features equate to a loss of control for participants. Plan sponsors should adopt simplified enrollment processes and use strategic communications to drive home the message that these features are aimed not at usurping control but rather at helping participants improve their retirement outcomes.

The survey found great interest in automatic plan features from participants. Nearly half of participants worry they won’t meet their retirement goals. They say they are doubtful they are saving enough for retirement or that they will have enough retirement income to meet their monthly expenses for life.

Nearly three-quarters of plan participants familiar with automatic enrollment consider it a very important plan design feature. With increasing numbers of DC plans adopting auto enrollment, more than six in 10 participants say they are familiar with the feature and nearly half have experience with it. While 44% of all participants consider auto enrollment very important, the figure jumps to 71% among those familiar with it. Participant views on re-enrollment track a similar curve; 39% of all participants surveyed consider it very important, but the percentage jumps to 63% with familiarity.

“The number [of plan sponsors] re-enrolling all employees is still small. They need to do so to help all participants, not just new participants,” Reddy says.

Plan participants aren’t as familiar with automatic escalation of contributions to their DC plans as they are with automatic enrollment. Forty-nine percent of those surveyed say they are somewhat or very familiar with auto escalation, but only a fraction—12%—have experience with it, primarily due to a lack of access.

Nonetheless, nearly one-third of participants consider auto escalation very important to plan design, and, as with auto enrollment, that figure nearly doubles with familiarity and experience. Sixty-three percent of participants familiar with the feature say it’s very important, as do 65% of those with experience.

NEXT: Investing help and understanding progress are needs cited by participants

Less than half of DC plan participants are highly satisfied with them in many key areas. Their plans most often fall short, participants say, in protecting them from financial market volatility, in helping them choose the right investments, and in maximizing their investments’ growth potential. Many participants also give their plans less-than-stellar marks for their ability to help them secure an adequate income source once they retire, understand how much they need to save for a secure retirement, or monitor and understand their progress toward their retirement savings goals. Plans do best, participants say, at helping them get started with saving for retirement.

Account growth and investment options are key to participant satisfaction with their plans. Asked what works well with their retirement plans and what doesn’t, participants who are most satisfied cite their investment options (mentioned by 32% of highly satisfied participants), the growth of their accounts (mentioned by 27%), and the matching contributions made by their employers (15%).

However, those who are least satisfied with their plans call out those same issues as areas that could be improved. Eighteen percent of those participants cite dissatisfaction with account growth, 14% with the employer match, and 11% with investments—highlighting the critical role these play in plan satisfaction.

Asked on what plan sponsors should focus, 66% said maximizing account growth potential is important, 64% cited securing an adequate income source, 63% said helping them choose the right investments, and 61% cited helping them monitor and understand their progress.

Fifty-six percent each said helping them understand how much to save and protecting them from market volatility were important focuses.

“A good outcome is making sure participants get to retirement with enough money to generate an income stream that helps them get through retirement with dignity and without outliving their money,” Reddy says. “The best way to do this is to get them saving and saving enough, rebalancing investments and offering guaranteed lifetime income solutions.”

He notes that most of what plan sponsors can do can be done with little or no cost to them or participants, with the exception of lifetime income solutions.

The research report may be downloaded from here.