Decoding Retirement Income: The Plan Sponsor Preference Gap

Plan sponsors and participants are not fully aligned on retirement income preferences, even though both groups are focused on security in retirement. Sponsors tend to favor solutions that include guaranteed lifetime income, with partial annuitization emerging as the strongest strategy in the paired comparison results.

The main challenge is implementation, as sponsors worry about integration costs, administration, communication, and fit with participant needs. By contrast, many participants still value access to their savings more than guarantees, even if that means less income certainty later. This gap suggests a real opportunity for plan design and education to bridge expectations while balancing flexibility with long-term protection.