In-plan annuity guarantees allow participants in retirement plans to convert some of their savings into guaranteed lifetime income while they are still working, the survey authors explain.
The survey of covered in-plan guarantee availability and election, and finds that in 2013, the total assets covered by an in-plan guarantees increased 31% since 2012 to reach $2.9 billion. The number of plans offering in-plan guarantees increased to 23,500 in 2013, a 10% increase compared with 2012.
In addition, the survey finds that eight out of 10 employees believe that employers should provide ways to convert savings into sustained retirement income. Younger employees are particularly interested in this option, results show. Ninety percent of employees between ages 18 and 34 say they somewhat or strongly agree that employers should provide avenues to convert savings into income at retirement.
The number of employees who have access to in-plan guarantees as part of their retirement plans increased to nearly 2.3 million, up 28% compared with 2012. The total number of employees who elected an in-plan guarantee is much smaller, at 49,900, an increase of 5% for 2013.
The survey authors note that guaranteed lifetime withdrawal benefit and deferred income annuities are the two types of in-plan guarantees that are currently sold in retirement plans.
LIMRA SRI researchers also asked employees about various financial topics and found that four in 10 want to learn more about how to generate retirement income. Because no one knows how many years they will live in retirement, the researchers note that in-plan guarantees can be an effective way to create an income stream and mitigate financial issues that can affect a long retirement.