Only 3% of workers have heard of in-plan annuities, yet 92% want employer-offered income solutions. Fiduciary fears, education gaps, and design complexity block adoption. JPMorgan finds 61% of non-offerers may add an option this year.
Only 3% of workers have heard of in-plan annuities. 92% want their employer to offer income solutions. That gap explains why adoption lags even as assets in target-date funds with annuity components hit $42 billion by March 2026, up nearly 70% year-over-year.
Alvarez & Marsal research among participants aged 40–60 found that 84% would be more likely to purchase if automatically included in their plan. 70% ranked guaranteed lifetime income as "most important." Fear of outliving savings scored 4.29 out of 5. Yet only 6–16% of plans currently offer guaranteed in-plan income solutions, with uptake concentrated among larger employers.
The barriers are threefold: education gaps, fiduciary risk perception, and design complexity. Participants trust advisors most (4.35 out of 5) but confidence in independently purchasing an in-plan annuity drops to 3.42. Advisers and consultants are the gatekeepers: 90–92% of sponsors work with them. Solutions that feel complex or hard to explain to plan committees are quickly dismissed.
Fiduciary risk perception remains high even with SECURE 2.0 safe harbors. Only 37% of sponsors feel confident explaining annuity value to decision-makers. Providers that offer robust due-diligence packages and clear governance support see higher win rates, advisers say.
Participants want simplicity and portability. They want a clear answer: "If I contribute $X, what monthly income will I receive at age Y?" Older participants prioritize flexibility; younger ones focus on accumulation. High-net-worth segments care more about inflation protection and customization.
Advisers filter ruthlessly for fit and ease. Recordkeeper-bundled solutions have an advantage due to seamless data flows. Direct-from-carrier solutions must demonstrate materially better outcomes to overcome the friction of an extra vendor.
Education remains a major hurdle. Participants trust advisors, not chatbots. Scaling credible guidance through financial advisors or trained benefits consultants is a barrier. Hybrid models that combine plan-level income solutions with personalized guidance at key inflection points are gaining traction.
Design matters. Participants want formulaic transparency: a clear mapping of contributions to future monthly income. Standardized solutions with straightforward administration are attractive to mid-market sponsors. The rapid growth of TDFs with annuity components shows that embedding income solutions in familiar structures reduces friction.
Portability is table stakes. With an average of 13+ job changes over a career, products must accommodate frequent job changes and rollovers. Participants value clarity and mobility.
JPMorgan's 2025 survey found 79% of sponsors believe their plans should help participants generate retirement income. 61% of non-offerers are likely to consider adding an option this year. TIAA research shows 76% of defined contribution plan sponsors expect demand to grow significantly by 2030.
Prepared with AlphaScala editorial tooling from the source reporting linked above. Indexable analysis may include a cited Alpha Score value. Publishing checks screen each story before release. Educational coverage, not personalized advice.