Plan sponsors are “slowly embracing”lifetime income solutions in defined contribution plans, butthey’re turning more toward plan withdrawals, education andplanning tools than they are to products such as annuities.

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That’s according to a new study from Willis Towers Watson, which defined lifetimeincome solutions as “includ[ing] education and the tools necessaryto help plan participants determine how to spend down accumulatedsavings in retirement, as well as in-plan and out-of-plan optionsthat create streams of income from employer-sponsored retirementplans.”

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The most popular option among the 10 listed in the study waspartial and/or systematic withdrawals during retirement, which wasoffered by 73 percent of respondents; 3 percent were consideringadding it in 2016. Another 15 percent of respondents said they wereconsidering adding it for 2017.

Lifetime income planning tools are offered by 64 percent ofrespondents, with another 10 percent considering adding them in2016 and 18 percent considering doing so in 2017. Lifetime incomeeducation was the choice of 60 percent, with 8 percent consideringadding it this year and 22 percent considering it for 2017.

Only 33 percent offered an in-plan managed account service witha nonguaranteed payout service, but when it came to sponsorsoffering annuities and similar products, the numbers are muchlower—and employers are reluctant to consider moving in thatdirection.

Just 16 percent say they offer out-of-plan annuities availableat the time of retirement, where the participant selects theprovider(s) using a third-party service or tools. Eight percentoffer an in-plan deferred annuity investment option, and 6 percentoffer out-of-plan annuities available at the time of retirement,where the plan sponsor has selected the provider(s).

The study asked why sponsors are so hesitant to adopt annuitiesand similar products, and sponsors offered several reasons. Chiefamong them were duciary risk (81 percent), cost (67 percent) and“market offerings that are not satisfactory or are too new” (60percent).

In addition, sponsors said that participant usage of lifetimeincome solutions is low overall. Sixty-one percent said that aquarter or less of their participants used in-plan managed accountservices with a nonguaranteed payout service, while just over halfreported a similar usage of lifetime income education. Less than aquarter of employees capitalized on lifetime income planning tools,or used partial or systematic withdrawals during retirement atroughly half of the companies.