Education a Big Part of Game Plan
That gets to a core issue—annuities being traditionally known as complex financial products that confound and confuse most consumers—not to mention plan sponsors and even some advisors.
Teresa Hassara, senior vice president for Retirement and Income Solutions at Principal Financial Group, said better engagement and education is sorely needed—and that effort will be rewarded. “Plan sponsors that spend considerable time advocating for their plan, marketing their programs, tracking the statistics, and seeking out the participants who are not using their benefits tend to have much better results,” Hassara said. “Plan sponsors and providers need to continue working together to tailor communications, increase engagement, and adapt programs where they are not working.”
Matt Wolniewicz, President of Income America, said the first step to educating participants is to have a solution that is easy for them to understand, with the features they want: control, protection, and growth potential. “By emphasizing the many upsides of guaranteed income solutions, we can help participants begin to visualize a more secure retirement,” Wolniewicz said.
One of the industry’s most prolific road warriors, Wolniewicz said that in addition to Income America roadshows, he educates advisors and plan sponsors via webinars, conferences, and online education. “From our active social media channels to our ‘On the Money’ video series, we’re getting the word out about guaranteed income and its benefits.”
Wolniewicz said Income America is launching a roadshow in the second quarter of 2024 to help plan sponsors and advisors understand where to begin, how to compare options, and how to implement their chosen solution.
Gray said Allianz Life is actively contributing to the education of plan sponsors and advisors “by publishing our own research and thought leadership on crucial topics. This includes white papers on a range of topics from the importance of personalization to how to navigate the wide range of GLI options as well as digestible blogs from our knowledgeable team on topics across technology, product, and diversity, equity and inclusion.”
He notes that the latest white paper, “Product Reframed,” sets out to dispel common myths and misconceptions about GLI products and provide an actionable path forward for advisors to incorporate GLI in their practice.
If the needle is to be noticeably moved in adoption of in-plan guaranteed income solutions, those education efforts may very well end up being a key to the movement. That’s because even though participants are showing more interest, most plan sponsors still believe in-plan retirement incomes are too complex—at least according to a new study from Greenwald Research released in late January.
“Most plan sponsors believe income options with GLI would be best for participants,” said Greenwald Research CEO Lisa Greenwald, “but they have strong concerns about the complexity of those income options and the fees that come with them.”
The survey found that 59% of plan sponsors view in-plan retirement income options as too complex. Nearly one in three are concerned that associated fees will mean higher costs for their companies, while 30% are concerned about the additional administrative work that offering income options would require. Sponsors also remain concerned about ensuring that participants have enough choices of retirement income options on the menu.
“While this underscores the need for continued, foundational education on the retirement income category, the interest and perceived need for this type of solution seems quite real,” said study director Eric Sondergeld.
Allianz Life’s Gray agrees, pointing out that the market has made significant progress in the past 12-24 months in the technology, infrastructure, education and tools to support the integration and adoption of guaranteed lifetime income solutions.
“These products are no longer confined to theoretical discussions—we’re witnessing real-world integrations and launches happening across technology platforms, recordkeepers, and plan types,” Gray said. “This progress is evident across all plan types and sizes, with participant adoption steadily increasing. While still in its early stages, this is remarkable.”
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