In-plan annuities stay at 9% of workplace plans

Nine percent of workplace plans offered an in-plan annuity in 2024, little changed since 2020, according to Plan Sponsor Council of America research cited in a Bipartisan Policy Center brief published Oct. 29. The brief argues the next constraint is not more product but sponsor confidence, plan infrastructure and participant take-up.

The brief draws on two roundtables BPC convened in 2026 with MetLife, Prudential and TIAA, as 401(k) Specialist reported on Oct. 30. Insurers, institutional advisors, consultants, recordkeepers and plan sponsors took part.

For advisors who work with plan sponsors, the brief shifts the diligence question from product selection to plan design. A committee weighing a default has to ask its recordkeeper whether income can be built into the plan's target-date fund or managed account, and how the choice gets documented. That is a different set of questions from the ones a committee asks about a standalone annuity contract added to the menu.

Roundtable participants broadly agreed that protected lifetime income has value. They also agreed on the need to make it more accessible in defined contribution plans. Workers' concern about outliving savings is well documented, the brief notes, but it has not turned into annuity purchases. Some sponsors said employees rarely ask for lifetime income products at all.

The brief proposes a structural fix: income built into a target-date fund, a managed account or an automatic allocation of a slice of participant assets could raise use. The same mechanism has worked with automatic enrollment, the brief says. It also says policymakers and the industry need better evidence on when default approaches are appropriate, leaving that threshold unsettled.