PLANADVISER - July/August 2017 - 7

data points
Retirement Income Options
Larger plans are beginning to embrace products that guarantee income
SOME retirement plan sponsors may
be waiting for the Department of Labor
(DOL) to issue safe harbor provisions
for retirement income products. Yet,
comparing the 2016 PLANSPONSOR
Defined Contribution (DC) Survey with
the 2015 edition shows a slight uptick,
at least among plans with $50 million
of assets or more, in the use of in-plan
products
that
guarantee monthly
income.
Still, allowing retirees to make
systematic withdrawals rather than
offering them an annuity product is
the more common approach retirement
plan sponsors take to providing
ongoing income. This practice also
shows increases among plans with
$50 million of assets or more. Among
midsize plans-those with $50
million to less than $200 million in
assets-64.3% now make this provision,
up from 57.8% in 2015. Among
large plans-$200 million to less than
$1 billion-71.4% allow systematic
withdrawals, up from 57.8%; 71.3% of
mega plans-those with $1 billion or
more-now allow them, up from 62.4%.
Retirement Income-Oriented Products/Services Offered in 401(k) Plans
In-Plan Income
Products That
Guarantee
Monthly Income
2015
2016
Micro (<$5mm)
Small ($5mm - <$50mm)
Mid ($50mm - <$200mm)
Large ($200mm - $1b)
Mega (>$1b)
In-Plan Income
Products That
Guarantee
a Base Benefit
2015
2016
5.8% 5.4% 2.2% 2.6%
7.2% 6.9% 3.1% 3.5%
7.8% 9.1% 4.3%
In-Plan Income
Not Offering
Guarantees
2015
2016
Out-of-Plan
Annuity Purchase/
Bidding Service
2015
2016
Unsure
2015
2016
No Income
Products
Offered
2015
2016
6.9% 4.7% 0.9% 1.3% 37.1% 39.4% 60.1% 50.3%
7.3% 4.7% 2.8% 1.9% 24.7% 31.5% 58.2% 56.5%
8.1% 10.4% 3.9% 4.3% 6.6% 5.4% 3.9% 1.5% 14.8% 19.9% 67.8% 65.4%
5.1% 11.0% 7.9% 5.2% 3.4%
9.4% 16.4% 69.4% 66.6%
6.2% 9.5% 1.2% 4.1% 13.0% 12.0% 15.5% 12.9% 6.8%
Does Your DC Plan Allow for Systematic Withdrawals* at Retirement?
Yes
2015
Micro (<$5mm)
Small ($5mm - <$50mm)
Mid ($50mm - <$200mm)
Large ($200mm - $1b)
Mega (>$1b)
41.4%
52.4%
57.8%
57.8%
62.4%
2016
34.8%
49.2%
64.3%
71.4%
71.3%
2015
23.9%
30.7%
32.9%
35.2%
30.6%
7.9% 61.5% 62.2%
Among midsize plans, 10.4% now
offer in-plan products guaranteeing
monthly income, up from 8.1% in
2015. Among large plans, 9.1% offer
the products, up from 7.8%, and,
among mega plans, 9.5% offer them,
up from 6.2%.
Mega plans are the only ones to
supply other retirement income solutions
at any meaningful rate: 12.0%
offer in-plan income solutions without
guarantees, and 12.9% conduct an
out-of-plan annuity purchase/bidding
service. -Lee Barney
No
Unsure
2016
27.3%
31.9%
29.6%
23.0%
24.3%
2015
34.8%
16.9%
9.4%
7.0%
7.0%
2016
37.9%
18.9%
6.1%
5.6%
4.4%
*Systematic withdrawals versus lump-sum or partial distributions allow participants to schedule a series of recurring payments, thus creating a predictable
stream of retirement income.
Sources: 2015 and 2016 PLANSPONSOR Defined Contribution surveys
planadviser.com july-august 2017 | 7
http://www.planadviser.com
PLANADVISER - July/August 2017

Table of Contents for the Digital Edition of PLANADVISER - July/August 2017
