Report: Lifetime Income Solutions Survey

What actions are employers taking to reduce employees’ longevity risk?

August 4, 2016
| United States

Based on our experience, there is growing evidence that many employees are not financially ready for retirement, and plan sponsors are increasingly concerned about the gravity of this lack of preparedness.

Current status regarding lifetime income solutions

Lifetime Income Solutions
Based on respondents to the 2016 Willis Towers Watson Lifetime Income Solutions Survey.
Numbers may not add up to 100% due to rounding.

Retirement income planning is an increasingly important piece of the safety net that employees need to ensure that their financial well-being is secure. Employees are being asked to take more responsibility for their retirement saving, including participation in their defined contribution (DC) plans. In part, this reflects the growing number of employers that are transitioning employees from defined benefit (DB) to DC plans.

This research explores what actions employers are taking to address longevity risk.

The results indicate that U.S. employers that sponsor DC retirement plans are slowly embracing lifetime income solutions. Specific insights include:

  • Roughly one-quarter of employers (23%) have adopted one or more lifetime income solutions.
  • Another 18% will either implement a solution this year or consider solutions for next year and beyond.
  • Of employers offering lifetime income solutions, the most prevalent are systematic withdrawals during retirement (73%), followed by income planning tools (64%) and education (60%).
  • Employers are reluctant to use insurance-backed products in DC plans despite their effectiveness in minimizing longevity risk.