New Research Indicates Strong Plan Sponsor Interest in Guaranteed Lifetime Income Options

Allianz Life research shows sponsors see value in new choices and are ready to act

Key findings snapshot:

  • 87% of plan sponsors believe providing an option that guarantees income for life in a retirement plan will lead to greater satisfaction with the plan.
  • 84% of plan sponsors believe an investment option in a retirement plan that can provide guaranteed lifetime income is valuable and can increase financial security in retirement.
  • 85% that do not currently offer an investment option with guaranteed lifetime income are at least somewhat likely to consider adding one in the next two years.

 

MINNEAPOLIS – Oct. 11, 2021 – Plan sponsors overwhelmingly see the value of guaranteed lifetime income options according to new research released today by Allianz Life Insurance Company of North America (Allianz Life). In addition, the majority are now ready to begin offering these new choices, almost two years-post SECURE Act.

 

According to the new data, plan sponsors indicated that they believe offering a guaranteed lifetime income option is a wise move that will go over well with plan participants. Of those surveyed, 87% of plan sponsors believe providing an option to get income that is guaranteed for life in a retirement plan will lead to greater satisfaction with the plan itself.

 

The rationale for that belief is clear as well. Eighty-four percent of plan sponsors believe an investment option in a retirement plan that can provide guaranteed lifetime income once the participant retires is valuable and can increase financial security in retirement according to the study.

 

“It was not completely surprising to see such strong interest from plan sponsors,” said Matt Gray, head of Employer Markets, Allianz Life. “Data from our research over the past year indicated very strong interest in guaranteed lifetime income options among plan participants. Plan sponsors are clearly listening and ready to meet those demands.”

 

Plan sponsors also have clear intent to act on the interest. Eighty-five percent of those sponsors that currently do not offer one said they are willing to consider adding an investment option with guaranteed lifetime income in the next two years, with 54% saying they are likely to do so.

Demand from plan participants

Allianz Life also recently released data that indicates plan sponsors and plan participants are seeing eye-to-eye regarding availability of guaranteed lifetime income options as part of an employer-sponsored plan.

Key findings included:

  • 73% of employer-sponsored participants would consider an option that offers guaranteed income for life in their plan if available.
  • 64% of employer-sponsored plan participants stated that market volatility caused by COVID-19 has increased their interest in adding an option that offers lifetime income into their plan.
  • 77% said providing an option for lifetime income within their plan would demonstrate their employer has a vested interest in their retirement readiness and wellbeing, and 65% said this option would increase their loyalty to their employer.

“Guaranteed lifetime income options have increased in overall popularity and there is increased awareness as to the importance of these products as part of an overall retirement plan,” added Gray. “The SECURE Act has opened the door for millions of Americans to better address the risks that come with retirement and to ensure they are ready for what will likely be a lengthy retirement.”

About Allianz Life Insurance Company of North America

Allianz Life Insurance Company of North America, one of the FORTUNE 100 Best Companies to Work For® and one of the Ethisphere World’s Most Ethical Companies®, has been keeping its promises since 1896 by helping Americans achieve their retirement income and protection goals with a variety of annuity and life insurance products. In 2020, Allianz Life provided additional value to its policyholders via distributions of more than $10.1 billion. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with approximately 150,000 employees in more than 70 countries. Allianz Life is a proud sponsor of Allianz Field® in St. Paul, Minnesota, home of Major League Soccer’s Minnesota United.