While more than one-third of people surveyed by LIMRA are interested in a guaranteed income for life feature within their plan, only 1.8 million participants are using one — representing $2.2 billion in assets and very low average account balances. In research conducted at the end of 2012 with six providers representing 90% of the in-plan guarantee market, LIMRA found that adoption was highest in smaller plans — perhaps driven by the providers selling them.
Portability issues still haunt the product, as do costs and finding a company strong enough to back the guarantee. Regardless, there is a demand for people to convert their plan balances into lifetime income, and it would make sense to make that shift within the plan before retirement. Perhaps the DOL’s proposed rules to show a stream of expected income along with account balances on participant statements will make in-plan guarantees more popular.
