An email has been sent to your address with instructions for changing your password.
There is no user registered with this email.
Sign Up
To create a free account, please fill out the form below.
Thank you for signing up!
A confirmation email has been sent to your email address. Please check your email and follow the instructions in the message to complete the registration process. If you do not receive the email, please check your spam folder or contact us for assistance.
Welcome to our platform!
Oops!
Something went wrong while trying to create your new account. Please try again and if the problem persist, Email Us to receive support.
Post-SECURE 1.0, Majority of Retirement Plan Consultants Have Taken Action on Guaranteed Retirement Income Options
Rhea-AI Impact
(Low)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary
MetLife's 2023 Retirement Income Pulse Check study reveals that 82% of defined contribution plan consultants are increasingly confident in recommending retirement income options since the SECURE Act's passage in December 2019. Notably, 93% have taken action related to these options, with 68% conducting evaluations of available products. Despite positive trends, challenges remain, as 47% cite the complexity of products as a hindrance to adoption. Nevertheless, 11% of plan sponsors have already incorporated guaranteed income options, indicating a growing market interest.
Positive
82% of consultants are more comfortable recommending retirement income options.
93% of consultants have taken action regarding retirement income options.
60% of consultants are likely to consider purchasing an annuity for themselves.
11% of plan sponsors have incorporated guaranteed retirement income options since SECURE 1.0.
Negative
47% of consultants find product complexity a significant barrier to client implementation.
62% of consultants believe new solutions introduced since SECURE 1.0 are difficult to understand.
82% of consultants say they have gotten more comfortable recommending these options, according to MetLife’s 2023 Retirement Income Pulse Check study
NEW YORK--(BUSINESS WIRE)--
Following the passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act in December 2019, the majority of defined contribution (DC) retirement plan consultants, 82%, report that they have gotten more comfortable recommending retirement income options to their clients, according to MetLife’s 2023 Retirement Income Pulse Check study. What’s more, an overwhelming majority of consultants, 93%, have taken some action regarding retirement income options.
“Since SECURE 1.0 made it easier to offer retirement income options in DC plans, we’ve seen both consultants and plan sponsors become more comfortable with these solutions,” says Roberta Rafaloff, vice president, Institutional Income Annuities, MetLife. “In fact, our study found 60% of consultants say they are likely to consider purchasing an annuity option for themselves, showing they understand the security these solutions offer retirees.”
Increasing Activity Around Guaranteed Retirement Income Options
Among the actions consultants have taken, 68% have conducted due diligence/evaluated the guaranteed retirement income options available in the DC market, 63% have met with their clients’ investment committees to discuss the addition of a guaranteed retirement income option, and 48% recommended that their clients consider incorporating a guaranteed retirement income option in their DC plan.
Consultants report plan sponsors are taking action as well, with 56% of consultants stating their plan sponsor clients have conducted due diligence and 55% state their plan sponsors have met with their investment committees to discuss the addition of a guaranteed retirement income option. Four in ten (40%) consultants say their plan sponsors have issued a Request for Proposal/Request for Information from insurance companies/annuity providers.
Potential Obstacles with Newer Solutions
Even though consultants and plan sponsors have taken positive steps in incorporating retirement income options into DC plans, some potential challenges remain. While low adoption rates have traditionally been attributed to lack of interest and negative impressions of annuities, 47% of consultants say the biggest issue that stands in the way of their clients implementing these solutions is that these products are complex and difficult for them to explain.
In fact, when asked to characterize the new solutions that have been introduced to the market since SECURE 1.0 passed – many of which are investment options with embedded income – 62% of consultants say they are difficult to understand.
“It may be tempting to offer products with many features to address the various potential needs of plan participants,” says Rafaloff. “But a complex solution may not be successful, creating confusion for plan sponsors and participants. Simplicity should be the guiding principle when looking at these offerings. Immediate income annuities and qualifying longevity annuity contracts (QLAC) are products that tend to be much easier to understand.”
The Importance of Simplicity and Guarantees
Consultants cite simplicity, along with guarantees, as the most important product attributes for retirement income solutions. According to the study, 96% of consultants state it is important (i.e., critical or very important) that the product guarantees money will not run out and the same percentage, 96%, report a product that is simple and easy for participants to understand is important when evaluating these solutions.
The Future of Guaranteed Retirement Income Options
As the market continues to evolve, consultants and their plan sponsor clients are showing growing interest in these solutions and are taking steps to offer them in DC plans. To date, one in 10 plan sponsors, 11%, say they have incorporated a guaranteed retirement income option into their DC plan post-SECURE 1.0. Among plan sponsor-clients that aren’t yet making retirement income solutions available to their plan participants, consultants say 27% of their clients are considering offering a retirement income option in their DC plan, many within the next 5 years.
About the Study
The survey was conducted online by Greenwald Research, in partnership with ISS Media, owner of PLANADVISER and PLANSPONSOR magazines, on behalf of MetLifebetween October 25 and December 9, 2022, among 74 defined contribution (DC) plan consultants. Consultants needed to be at least somewhat knowledgeable about various DC plan retirement income options; at least occasionally recommend DC retirement income options to plan sponsor-clients, or if not, be at least somewhat likely to in the near future; and, have at least one retirement plan client with $500+ million in assets.
About MetLife MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers build a more confident future. Founded in 1868, MetLife has operations in more than 40 markets globally and holds leading positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.
What are the key findings from MetLife's 2023 Retirement Income Pulse Check study?
The study found that 82% of consultants are more comfortable recommending retirement income options, with 93% taking action regarding these solutions.
How has the SECURE Act impacted retirement income options?
Since the SECURE Act's passage in December 2019, it has facilitated consultants' and sponsors' increased comfort and action in recommending retirement income options.
What percentage of plan sponsors have incorporated guaranteed retirement income options post-SECURE 1.0?
11% of plan sponsors have incorporated guaranteed retirement income options into their defined contribution plans since the SECURE Act.
What challenges do consultants face in recommending retirement income solutions?
Consultants report that product complexity is a significant barrier, with 47% stating it complicates client implementation.
How many consultants are considering purchasing annuities for themselves?
60% of consultants indicated they are likely to consider purchasing an annuity option for their own retirement planning.
