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The retirement income conversation within defined contribution plans is reaching a new level. Fueled by legislative tailwinds, technological advances and shifting participant needs, the last five years have seen a surge of new ideas, tools and products.

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“Recordkeepers are expanding their platforms to support more retirement income solutions. From integrating insurance-based solutions to improving education and advice, their capabilities are evolving to meet the changing demands of the DC system. This shift is not just about enabling income payments—it is about building the infrastructure to support decumulation.”

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“Still, the path forward for many is not clear. While industry innovation is necessary and healthy, the current environment feels like “throwing spaghetti at the wall.” There is a lack of consistency and little agreement. With so many new products across both guaranteed and nonguaranteed income—plan sponsors must navigate a maze of features, trade-offs and implementation considerations.”

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“Start by defining the problem: Who are you targeting? For example, only about 14% of all participants in DC plans tend to be retirement eligible. What risks are you trying to address? Spending behavior, volatility, longevity? Are you prioritizing guarantees, flexibility or simplicity? Once these questions are answered, you can begin to evaluate solutions and determine your commitment level as a plan sponsor.”

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“Plan sponsors must also ensure their plan design, recordkeeping and administrative operations are retiree friendly. Review questions about the flexibility of available distribution options and the types and amount of related fees and paperwork. While 93% of plan sponsors offer systematic distributions, we see 18% of older participants (at least 65 years olds) using them. Retirement income is not just about what is in the plan—it is also about how easy it is to get money out in a way that aligns with participants’ real-life needs.”