Are Plan Sponsors Really Ready for Retirement Income?

It’s widely said that 10,000 Boomers are heading into retirement every day—and survey after survey indicates that they are interested in some kind of “solution” to provide a dependable stream of income. But what about advisors? 

There remains a traditional reluctance to bring those solutions “inside” the workplace retirement plan—ostensibly due to fiduciary, cost and product complexity concerns, though the former, and perhaps at least some of the latter, have arguably been at least somewhat—and purposefully—mitigated by provisions in the SECURE Act, though the focus has surely been a bit sidelined by workplace concerns related to the COVID-19 pandemic.

That said, SECURE 2.0’s expansion of QLACs (Qualified Longevity Annuity Contracts) has been seen as additional encouragement for these solutions. 

As a series of new offerings continues to come to market while advisory firms are snapping up wealth management practices and target-date fund glidepaths are increasingly found to be crafted with a “through,” rather than a “to,” retirement date focus—during the 2023 NAPA 401(k) Summit, we asked advisor registrants—nearly 600 of them, our Summit “Insiders”—whether the perspective of their plan sponsor clients had shifted at all.

All in all, the overall interest levels were pretty much in line with the readings in the 2022 Summit Insider, with slight increases in the minimal/occasional categories—with a big drop in the non-existent grouping (21% up from 14% in last year’s survey), and in the high grouping (from 7% to 2%).

Generally speaking, how does that level of plan sponsor interest in in-plan retirement income compare with a year ago?

Once again, the needle didn’t move much—but the "higher/more" reading dropped by half.

Check out the rest of the 2023 NAPA Summit Insider at https://bit.ly/23Summitinsider1