Achieving widespread adoption of retirement income solutions in defined contribution plans requires persistent effort, collaboration, and overcoming significant challenges related to transparency, risk, and incentives. For decades, the in-plan retirement industry has advocated for change, yet adoption by plan sponsors, participants, record keepers, and advisors has remained limited. At the 4th annual RPA Retirement Income Roundtable & Think Tank, industry leaders discussed pathways to achieving significant adoption. Despite signs of progress, formidable obstacles persist, particularly concerns over risk and liability that deter plan sponsors. The discussions emphasized the essential role of industry collaboration in developing clear, accessible retirement options and providing proper incentives for advisors.
A key takeaway was the need for a reimagined approach to guaranteed income in defined contribution plans, tailored to the evolving workforce. Simplifying the language and structure of retirement income products, addressing advisor compensation issues, and enhancing participant engagement were identified as crucial steps forward. Stakeholders highlighted the importance of collaborative efforts within the DC ecosystem, supported by academic research validating retirement income benefits and shifting perspectives on retirement income as an asset class. Ultimately, achieving broad adoption hinges on patience, passion, and unified efforts across the industry.
For further insights, explore Fred Barstein’s latest wealth management article, “In-Plan Retirement Income: An Industry Waiting to be Born.“
