For years, the retirement industry has focused on accumulation—helping participants build their 401(k) balances. But as more Americans retire and live longer, a new challenge is coming into focus: decumulation—turning savings into sustainable income. Without a clear strategy, retirees risk outliving their savings or making poor financial decisions during uncertain markets.
That’s where the concept of a “Synthetic Pension Plan” comes in. Unlike traditional pensions, this approach integrates guaranteed income tools—like managed accounts and in-plan annuities—into defined contribution plans. It blends the growth potential of a 401(k) with the stability of predictable payouts, helping ensure retirement assets don’t just grow, but last.
At a recent TPSU program at the University of San Diego, TPSU Founder Fred Barstein spoke with Matt Gray of Allianz Life, who leads their defined contribution business. Matt emphasized the importance of shifting the industry’s focus from just building wealth to helping participants draw it down wisely in retirement. He highlighted how tools like managed accounts can automate this transition and how flexible income options—including in-plan or IRA rollovers—can better support participants’ long-term financial needs.
As Matt noted, most participants don’t wake up thinking they need an annuity—but with the right plan design, they won’t have to. The future of retirement planning is not just about climbing the mountain, but helping people get down safely—with dignity and income they can count on.
Read the Full Transcript Here:
Fred Barstein:
Greetings. This is Fred Barstein, CEO and Founder of TPSU and 401kTV. Just completed a TPSU program at the University of San Diego, and I am here with Matt Gray from Allianz Life. Welcome, Matt.
Matt Gray:
Thank you.
Fred Barstein:
Okay if we ask you a few questions?
Matt Gray:
Yeah.
Fred Barstein:
Before we do, tell our audience a little bit about yourself and your organization.
Matt Gray:
So yes, Matt Gray. I’m an actuary by background, I lead the Allianz Life’s defined contribution business. We offer in-plan guaranteed lifetime income solutions, and yeah, first time at one of these events. Thanks for the invite.
Fred Barstein:
Thank you. So one of the things we do at every TPSU program is we talk about the Ideal Plan, but the Ideal Plan only helps with the accumulation phase, and we’re about to change and go into the perfect plan, which we call a synthetic pension plan. So how would that perfect plan work where we’ve accumulated enough money, but now how do we get down the mountain on that? What does that look like, and is that realistic now?
Matt Gray:
Yeah, the point of a defined contribution plan is to provide income in retirement, but as you said, it accumulates this great nest egg, but then historically there hasn’t been a lot there to help people, like you said, down the mountain. So I think what you’re talking about, an interesting phrase and comparing it to defined benefit plan is introducing an in-plan guarantee that can help people generate a stream of income that they can [inaudible 00:01:51]. So, basically converting some of that over time as they climb the mountain into a solution that can provide that guaranteed income on the way down.
Fred Barstein:
We know people aren’t proactive, so can we do it for them? And how would we do that?
Matt Gray:
Yeah, there’s a few ways that it’s being done. One example is through a managed account, an advice solution. I’m an actuary by background, but most people don’t wake up and say, I need an annuity today. Even if they did, how much should you put in it? So, the managed account can personalize the timing and the allocation to a solution so that the people have the amount based on what a fiduciary is saying is right for them at that time that they’re ready to retire, and they can get that stream of income to support them.
Fred Barstein:
So, final question on that is a lot of plan sponsors don’t want to keep people in the plan. Is there an option for them? Okay, they’ve gotten that, they’ve accumulated money, it’s great, they’re ready to retire, but they don’t want them. How would that work?
Matt Gray:
Yeah, it really depends on the plan or the record keeper that’s making available. We’ve often seen that at the time of retirement, that portion actually rolls out into an IRA if they want, or it can stay in plan. Again, it’s up to what the administrator has built and what the sponsor wants, but yeah, it can go with that, because-
Fred Barstein:
It’s more likely what we’re going to see is institutional-priced IRA, not the retail on that?
Matt Gray:
Mm-hmm. Yeah, yeah.
Fred Barstein:
So, final question. This was your first TPSU. Number one, what did you think? And why should a plan sponsor come to one of these?
Matt Gray:
Yeah, I was very interested to hear what is on the minds of the plan sponsors and just everything they’re having to deal with. I think it was said multiple times, they’re wearing multiple hats, the retirement plan is something they focus on for a small percentage of their time, they need help and they have questions. I thought they were very engaged in being able to hear what other peers were doing and gain insights from that, hear from experts as well.
So I think they walked away feeling like the time was well spent, that they learned a lot of things that they can bring back. I love how at the end you said if you help just one person with what you learned today, totally worth it. But they’re serving hundreds of people, so there’s really an opportunity to improve retirement readiness overall.
Fred Barstein:
Great. Thank you for all that you and Allianz are doing and trying to bring in-plan guaranteed income to defined contribution plans. It’s very important to do that. Thank you again, Matt, and thank you for watching 401kTV. Please stay tuned for more programs like this.
