At a glance
- Under the model, allocating 20% of savings to automatic lifetime income leaves 30% of total retirement income guaranteed for life.
- For plan committees, the fiduciary safe harbor is the binding question.
- In-plan annuities appear in 9% of workplace plans, as Private Wealth Daily previously reported.
Prudential Financial proposed a revocable default that would allocate a portion of each 401(k) balance to guaranteed lifetime income.
Under the model, allocating 20% of savings to automatic lifetime income leaves 30% of total retirement income guaranteed for life. The paper's two recommendations are an expanded fiduciary safe harbor for plan sponsors and revocable coverage for participants. Its authors are David Blanchett, Prudential's head of Retirement Research, and Phil Waldeck, head of U.S. Business.
For plan committees, the fiduciary safe harbor is the binding question. A DCIIA survey cited in the paper found 70% of plan sponsors would be far more comfortable adopting automatic lifetime income features with fiduciary safe harbors built in. A balance converted into a guaranteed income stream would not roll to an IRA, shifting the rollover conversation to the opt-out decision at retirement.
In-plan annuities appear in 9% of workplace plans, as Private Wealth Daily previously reported. Prudential's 2026 Retirement Pulse survey, cited in the paper, found 16% of workers aged 50 or older have a clear withdrawal strategy for their savings and 28% regularly work with financial advisors.
Safe harbor expansion is a congressional act rather than a plan-design choice. The adoption timeline rests with lawmakers, not with the committees the paper addresses.
Reported by the Income & Annuities desk from 401(k) Specialist. Published . Corrections