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The new conversation around annuities in the workplace

With SECURE 2.0 making the biggest changes to the retirement system in decades, a growing number of employers will be weighing the possibility of adding annuities – which come with a mix of considerations – to their 401(k) plans.

By Kelly O’Donnell | April 04, 2023 at 10:11 AM
man typing the word Annuity (Photo: Shutterstock)

Nobel prize-winner (and our co-founder) William F. Sharpe called decumulation the “nastiest problem in finance.” A recent study by Greenwald Research revealed that 70% of plan participants are worried about running out of money in retirement. Transforming savings into a steady stream of income that will last their lifetime is an enormous undertaking for most near-retirees.

Solving for this problem is the holy grail for employers, the financial services industry and policymakers. Both bipartisan SECURE Acts (“Setting Every Community Up for Retirement Enhancement Act”) enacted into law included some of the biggest changes to the retirement system in decades, including key provisions that ease the fiduciary burden on plan sponsors when selecting, reviewing, and monitoring annuities and annuity providers.

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