2024 TIAA plan sponsor survey
Building a better retirement.
Five hundred employers told us the short-term goals for their plans, how they’d like to improve employees’ retirements and what’s standing in the way.
We taught people how to save. That’s not enough.
Employers have made great strides in helping employees save for retirement through their 401(k), 403(b) and 457 retirement plans. But that solves only half the problem—people need more help making that savings last the rest of their lives.
Who we talked to.
We surveyed 500 C-suite leaders in human resources and finance across America’s defined contribution industry to learn how they’re thinking about their plans’ purpose and their priorities going forward. What they said might surprise you.
Income is the outcome: three key insights.
Employers know there’s still work to be done. Automated plan features helped participants clear the first hurdle: saving. The challenge now is helping retirees turn that savings into income. But before sponsors can offer guaranteed income solutions in their retirement plans, they need to better understand annuities.
1. Employers see room to improve.
Employers do—and should—feel good about getting people to save for retirement. But a majority say workers' retirements could improve with an increased employer match, followed closely by guaranteed lifetime income, such as an annuity.
Sponsors say retirements could improve by increasing employer matches (57%) and offering guaranteed income (48%).
2. Up next and coming in hot: income.
Most employers agree guaranteed income is the solution. And while they’re looking for any sort of edge to attract and retain employees, they expect income will become ubiquitous.
76% of employers expect plans will adopt annuities as quickly as target-date funds were decades ago.
3. What’s missing? Annuity fluency.
It’s not that plan sponsors don’t know what an annuity is. But they don’t know how to take the conversation deeper into the role annuities can play in a diversified portfolio.
63% of employers can’t articulate the value of an annuity.
Take Two: Getting on the road to income.
Retirement looks nothing like it did a generation ago. Trends in longevity, spending and debt. Point to a different retirement landscape today. We've asked decision makers how they're thinking differently about defined contribution plans. What they said might surprise you. I'm Jason Kee, head of consumer relations at TIAA. It's time to take two. First, we found employers have done a great job helping employees save and invest.
But there's still a gap when it comes to retirement income. Second, employers understand what they're up against. Their employees need help converting savings into dependable income with universal acceptance that Social Security won't provide enough guaranteed income to sustainably budget in retirement, plan sponsors are doing something about it. 40% are planning to add an annuity option to their plan within the next two years.
Lastly, the need for annuity fluency. Most employers have a basic understanding of how annuities work, but often get lost in the details. There's a critical need to help plan sponsors understand the value and importance of annuities, how they fit into the default and best practices for implementing them into their plan. So how can we build a better retirement?
Well, no one has more influence over the retirement outcomes of American workers than the employers and the consultants who guide them. Explore the latest thinking from plan sponsors and our latest research, and stay tuned for the next release of Take two with TIAA for more insights to help you help your clients.
Target-date funds have been controlling risk as employees get to retirement. Annuities get them through retirement. Those two strategies marry up nicely. You need both.
Your next move.
No one has more influence over the retirement outcomes for American workers than their employers and the consultants who guide them. Download our report for more data or contact us to start helping people protect their futures.
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Additional insights
Learn more in our press release.
Any guarantees are backed by the claims-paying ability of the issuing company.
This material is for informational or educational purposes only and is not fiduciary investment advice, nor is it a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.
The “Building a Better Retirement” survey was conducted by Greenwald Research on behalf of TIAA.