LIMRA Secure Retirement Institute calculated that 3 million participants have access to an in-plan income guarantee through their employee-sponsored retirement plan in 2014, 32 percent increase from 2013. In addition, the new study found there was a 24 percent increase in the number of participants electing an in-plan guarantee to reach 71,300 in 2014.
In 2014, the number of retirement plans offering in-plan guarantees grew 41 percent totaling 33,500 and over 132 billion in assets are in plans that offer a in-plan guarantee, up 27 percent compared with 2013.
Prior LIMRA Secure Retirement Institute research reveals that consumers are most concern about having enough money to last throughout their retirement. Eight out of 10 U.S. workers believe that employers should provide ways to convert savings into retirement income according to Institute research. Younger workers are particularly interested in this option with 90 percent of workers age 18-34 said they somewhat or strongly agree that employers should provide avenues to convert savings into income at retirement.
Guaranteed lifetime withdrawal benefit (GLWB) and deferred income annuities (DIA) are the two types of in-plan guarantees that are currently sold in retirement plans. These products allow participants in retirement plans to protect some of their savings to provide future retirement income while they are still working and contributing to their plans.
The study found small plans (with less than $10 million in assets) are most likely to have to offer in-plan guarantees. In 2014, 31,000 small plans, 1900 mid-size plans ($10-199 million in assets), and 80 large/mega plans ($200 million+) offered in plan guarantees to their workers. Smaller plans are more likely to offer in-plan income guarantees because the early in-plan guarantee products were developed by life insurers , which tend to be in the small and mid size markets.
Total assets covered by an in-plan guarantee reached $3.6 billion, a 26 percent increase over last year. The average amount covered per participant is $50,000.