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Despite benefiting from regulatory and commercial advances designed to make in-plan retirement solutions more attractive, defined contribution executives continue to wrestle with concerns about cost and complexity as well as compatibility among employers and record keepers.

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To consultant William Ryan, the solution to an in-plan solution is hiding in plain sight: a target date series with a systematic distribution of assets upon retirement.

Ryan is a partner and head of defined contribution plan solutions at NEPC, which recently released an annual survey on DC plan trends and fees showing that people over 65 hold 45% of their assets in target-date funds. Among that age group, 68% have retired or left their employers.

“Unfortunately, only 26% have activated systematic distributions, but 26% is wildly greater than the 4% to 5% who annuitize,” Ryan said.

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The words “retirement income” or “lifetime income” are subject to different interpretations, Ryan added. To NEPC, the words retirement income simply mean “getting money out of the plan to fund a paycheck,” he said. “It doesn’t need to mean guaranteed and it probably shouldn’t mean guarantee, insured, or annuity.”

However, “lifetime income” has become a synonym for “guaranteed income” — words that are “creatively interchanged by insurance companies,” he said.

“This is why we at NEPC think the industry has communicated the success and objective of retirement income very wrong,” Ryan added. “The narrative has become hyperfocused on needing to add commercial insurance to DC plans, when most participants are entitled to government retirement insurance via Social Security, and some get employer retirement insurance via a pension plan.”