Fewer than one in five retirement plan sponsors reported offering a protected lifetime income option as of 2025, despite growing concern among workers about outliving their savings, according to a new issue brief from the Bipartisan Policy Center released this month. The report, developed in partnership with MetLife, Prudential, and TIAA, synthesizes findings from two roundtable discussions with insurers, advisors, consultants, recordkeepers, and plan sponsors. Participants broadly agreed that protected lifetime income—guaranteed payments from an insurance company that last for life—can help workers manage the risk of running out of money in retirement, yet adoption remains limited and many employees don't use these products even when they're available.
The data shows a retirement system in transition but not yet transformed. The Plan Sponsor Council of America found that 9% of plans offered an in-plan annuity in 2024, essentially unchanged since 2020, while 14% included a lifetime-income component within a target-date fund. A separate 2025 survey by PLANSPONSOR, which asked more broadly about insurance-based guaranteed income products, found that 16% of sponsors offered one. Meanwhile, access to defined contribution plans has risen among private-sector workers from 59% in 2010 to 70% in 2026, according to the Bureau of Labor Statistics, while access to traditional pensions fell from 20% to 14% over the same period. For a married couple at age 65, there's roughly a 50% chance that at least one spouse will live past 90, yet most retirement plans still offer no way to convert savings into guaranteed lifetime income.
The roundtables revealed what the report calls a disconnect between worker concern and actual demand. More than half of Americans worry about outliving their savings in surveys, yet some sponsors rarely hear employees asking for protected income products, and advisors reported that they, rather than plan sponsors, often initiate conversations about lifetime income. The report notes that participants identified several barriers: lack of understanding about how these solutions work, concerns about liquidity and access to assets, difficulty weighing the trade-off between a lump sum and guaranteed income, and a tendency to focus on accumulated savings rather than the income those savings can generate. Discussants emphasized that "putting a solution on a plan menu does not mean employees will use it," highlighting a gap between availability and activation that's likely to become increasingly important as the market expands.
The report traces the adoption challenge to several structural factors that the industry must address together. Product complexity makes it hard for advisors to conduct due diligence across different designs, since traditional performance metrics don't fully capture the value of insuring against longevity risk rather than simply generating returns. Plan sponsors remain highly sensitive to litigation and fees despite the SECURE Act's 2019 fiduciary safe harbor for selecting annuity providers, with many expressing uncertainty about how existing standards apply to lifetime income embedded within target-date funds or managed accounts. Recordkeepers present another bottleneck: many offer only a limited set of solutions, often their own, and adding new products can take considerable time, meaning a sponsor's options may depend more on which recordkeeper it uses than on which product best fits its workforce. Workers who change employers face portability challenges, potentially losing protection they've already paid for if a guarantee doesn't move with their assets to a new plan or IRA.
The Bipartisan Policy Center calls for coordinated action across the retirement system, with specific roles for each stakeholder. Insurers should prioritize clear communication and participate in comparison frameworks that streamline due diligence; advisors can bring protected lifetime income into standard plan reviews and help sponsors translate complexity into plain-language trade-offs; recordkeepers should lead on integration and portability so a sponsor's options aren't constrained by platform; and policymakers can build on recent guidance where fiduciary uncertainty remains and clarify where participant education ends and solicitation begins. The report concludes that the measure of success will be more workers retiring with confidence that their savings can support them for as long as they live.