So, how do you get these results using your defined contribution plans to ensure sufficient workforce velocity and manage costs? Several factors need to be included:

A time-sensitive window election with a specific competitive offer is critical. Current lifetime income options are typically passively offered or left to employees to research and find on their own.
An employer-run competitive insurance bid is a must. This ensures fair pricing and apples-to-apples annuity amounts. The employer also vets the quality of the insurer and their safety from a fiduciary perspective. Employees are understandably not comfortable and in almost all cases, not equipped, to do this due diligence themselves.
Offering various annuity features can enhance the number of employees that elect a lifetime income option. For example, straight life annuities, joint and survivor annuities, and the option of inflation indexing.
A communication package that addresses common risks, answers questions about fair pricing and helps with planning will also lead to a higher proportion that take the lifetime income offer.
The cost to the employer of implementing a window election does not need to be anything other than running the process of offering competitive and secure pooled retirement risks for their employees. Much of the process can be outsourced.

Related: Delayed: 25% of pre-retirees push back retirement, 15% unsure if they'll ever retire

Few employers understand the workforce effects of their retirement plan designs including decisions to move away from traditional defined benefit pension plans. There are often significant and costly unintended negative consequences for many employers.

Instant Insights /

Workers can't retire? Take 401(k) plan design to the next level

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