In-Plan Annuities in a 401(k): What the Industry Says Is Really Holding Them Back
In-Plan Annuities in a 401(k): What the Industry Says Is Really Holding Them Back
Insurers were asked what is blocking guaranteed income inside workplace retirement plans. The largest share did not name price, product design, or regulation. They named education.
An in-plan annuity is a guaranteed income option built into your 401(k)
Most retirement savers know the two halves of a 401(k) well enough. You contribute, the balance grows or falls with the market, and at some point you start taking money out. What the plan has historically never told you is how much you can safely withdraw, or for how long.
An in-plan annuity is the attempt to answer that question inside the plan itself. Rather than rolling your balance out to an insurance company after you retire, the annuity option sits on the plan menu alongside the target-date funds and index funds. You direct part of your balance into it during your working years, or convert part of it at retirement, and the insurer behind it commits to paying an income for life.
The product exists. The access does not. LIMRA reported that 90% of defined contribution plans had no in-plan annuity option at all (LIMRA, 2023), and earlier LIMRA research put the share of plans offering one at 14% (LIMRA, Securing the In-Plan Opportunity, 2023). For roughly nine in ten savers, this is still a theoretical choice.
The Goldman Sachs Asset Management 2026 annuity industry survey asked the companies that actually build these products why that gap persists. Their answer is the reason this article exists.
What the people who build annuities actually said
Goldman Sachs Asset Management surveyed more than 100 insurance professionals in the summer of 2026. Respondents averaged more than 20 years of industry experience and came from 28 insurance companies representing over $1 trillion in annuity assets (Goldman Sachs Asset Management 2026 Annuity Industry Survey, reported by PLANADVISER, October 2026).
On what retirees want, the industry is close to unanimous. 79% identified generating guaranteed income as the leading objective for retirees, and the survey reported participant appetite for some form of guaranteed income at 83%.
On what is stopping it, the answer was not product economics. 77% cited a lack of participant education or advice, along with the perceived complexity of the products. A further 47% pointed to plan sponsors being uninterested or apprehensive.
Marci Green of Goldman Sachs Asset Management framed the shift as structural rather than inventive, describing the next phase of retirement income as being about access, defaults and adoption rather than designing another product.
| Offer in-plan annuities as a standalone product | 36% |
| In the process of implementing them | 8% |
| Do not offer but are considering it | 30% |
| Engaged in some way | 74% |
| Expect a major trend within 3 years | 15% |
| Expect a major trend in the coming year | 5% |
| Rank in-plan income in their top 3 priorities | 31% |
All figures from the Goldman Sachs Asset Management 2026 annuity industry survey as reported by PLANADVISER, October 27, 2026. The total row is the sum of the three stated response categories above it.
Supply is moving faster than anyone expects adoption to
Three quarters of insurers are engaged. One in seven expects it to matter.
Put the survey's own numbers side by side and an unusual picture appears. Among the insurers surveyed, 36% already offer in-plan annuities as a standalone product, 8% are in the process of implementing them, and 30% do not offer them but are considering it. Add those together and roughly three quarters of the industry is engaged with the category in some form.
Worked example: 36% currently offering, plus 8% implementing, plus 30% considering, equals 74% of surveyed insurers engaged with in-plan annuities.
Against that, only 15% expect in-plan annuities to be a major industry trend over the next three years, and only 5% expect it in the coming year.
The result is a 74% to 15% split between industry effort and industry expectation. The companies building the product do not expect most savers to encounter it any time soon.
That split is the whole story. It is not that annuity companies decided workplace guaranteed income was a bad idea and walked away. Three quarters of them are doing something about it. It is that they do not believe the product will reach people at scale in the near term, and the barrier they name most often is one they cannot engineer their way out of.
Demand is not the constraint either
The demand-side numbers have been pointing the same direction for years. LIMRA reported that 70% of workers believe an in-plan guaranteed income solution should be an option (LIMRA, Securing the In-Plan Opportunity, February 2023). Willingness to actually convert savings into guaranteed income rose to 52% of workers in 2023, up from 38% in 2017 (LIMRA, November 2023). The 2026 Goldman Sachs Asset Management survey put participant appetite for some form of guaranteed income at 83%.
Plan sponsors have been moving too, if slowly. LIMRA found that 49% of private-sector plan sponsors without an in-plan annuity had considered adding one, and that among those interested, 75% expected to decide within the next 12 months (LIMRA, November 2023). Only 20% cited fiduciary concerns as a potential barrier.
What is left when you remove demand and fiduciary risk
If savers want it, sponsors are considering it, insurers are building it, and fiduciary liability has been addressed in statute, the remaining obstacle is the one 77% of insurers named. People do not understand what they would be choosing. A 401(k) menu that offers twelve funds and one annuity option presents a decision most participants have never had to make and have never been taught to evaluate.
That is a solvable problem, but it is solved with explanation, not with product development. Which is why understanding the structure before your plan offers one is worth the time.
Five things to check if your plan offers an annuity option
These are the questions plan paperwork rarely answers on its own. Availability, features and terms vary by state and by plan.
Which insurer is actually standing behind the income
Your employer chose the plan. An insurance company, not your employer, pays the income. The SECURE Act safe harbor requires a prudent selection process but does not impose a minimum financial strength or ratings standard on the insurer chosen. Ask who the carrier is and look up its ratings yourself.
Whether the income is guaranteed or market-linked
Fixed annuities offer guaranteed rates. Variable and other market-linked products are subject to market performance and do not promise a fixed return. Some in-plan structures place a withdrawal benefit on top of a market-linked account, which is a different arrangement again. Get the answer in writing before you allocate.
What happens when you leave the employer
The SECURE Act made annuities held inside a 401(k) portable, so a departing employee can roll the contract into another plan or an IRA without triggering surrender charges that would otherwise apply. Confirm how your specific contract implements that, because the mechanics vary by provider and by state.
What the option costs, and against what
The in-plan annuity will carry a cost the index fund next to it on the menu does not. That is not automatically a mark against it, because the index fund does not promise an income for life. Ask for the all-in number so you can weigh the guarantee against what you give up to hold it.
Whether the same money would do better outside the plan
In the 2026 survey, 67% of insurers offered out-of-plan annuities as a standalone product, against 36% offering in-plan versions. The out-of-plan market is larger and easier to shop on rate. The in-plan version may still win on convenience and institutional pricing. The point is to compare the two rather than assume the menu option is the default answer.
What the SECURE Act did and did not settle
The safe harbor removed the employer's objection, not the saver's homework
For years the standard explanation for why 401(k) plans avoided annuities was fiduciary risk. If an employer put an insurer on the plan menu and that insurer later failed to pay, the employer could be sued over the selection. That exposure was enough to keep most plan sponsors out of the category entirely.
Section 204 of the SECURE Act created a safe harbor for that selection. A plan sponsor that follows the prescribed process is protected from liability if the annuity provider subsequently fails, defrauds the employer, or is otherwise unable to satisfy its obligations under the contract. The statute also made in-plan annuity contracts portable, so a participant who changes jobs can move the contract to another plan or an IRA without being forced to surrender it and absorb the charges.
Those two provisions dismantled the main structural objection. LIMRA's finding that only 20% of plan sponsors now cite fiduciary concerns as a barrier (LIMRA, November 2023) reflects that change directly.
The standard the safe harbor actually sets
What the safe harbor does not do is vouch for the insurer. The selection standard turns substantially on the insurer being licensed by a state for seven years. It does not require a minimum financial strength rating, and it does not require the sponsor to measure solvency against investment-grade benchmarks. An insurer can satisfy the licensure test and still be a company worth researching before you commit a lifetime income stream to it.
The practical implication is simple. The safe harbor protects your employer. It does not do your due diligence for you. The financial strength of the carrier named on the contract is still something you check yourself, exactly as you would if you were buying the contract directly. Availability and terms vary by state.
The lifetime income disclosure
The SECURE Act also requires plans to provide a lifetime income disclosure, translating an account balance into an illustrative monthly income figure. The purpose is to reframe a balance as an income stream, which is the mental shift the entire in-plan annuity category depends on. The statute includes legal protection for sponsors whose estimates prove optimistic, so treat the figure as an illustration rather than a quotation.
Where this leaves a saver today
If your plan does not offer an in-plan annuity, you are in the majority, and nothing is lost by it. The out-of-plan market is where 67% of surveyed insurers already sell standalone annuities, and it is the market you can shop on rate today. If your plan does offer one, you now have a genuine choice to evaluate rather than a product to accept or avoid on instinct.
Either way the five checks above apply. The industry's own survey says the gap is explanation. Closing it for your own plan is a matter of asking those five questions and comparing what comes back against what the same money could buy outside the plan.
In-plan annuity questions
1 What is an in-plan annuity in a 401(k)? ▼
2 Why do so few 401(k) plans offer an annuity option? ▼
3 Can I take an in-plan annuity with me if I change jobs? ▼
4 Does the SECURE Act safe harbor mean the insurer is safe? ▼
5 Is an in-plan annuity better than buying one outside the plan? ▼
6 Do most workers actually want guaranteed income in their plan? ▼
Sources
- Goldman Sachs Asset Management 2026 Annuity Industry Survey, reported by PLANADVISER, October 27, 2026
- LIMRA, Securing the In-Plan Opportunity, February 2023
- LIMRA research on plan sponsor adoption and worker willingness, November 28, 2023
- SECURE Act Section 204 annuity safe harbor, portability and lifetime income disclosure provisions
Benchmark the option before you choose it
Whether or not your plan offers an in-plan annuity, knowing what the open market pays is how you judge it. Compare current annuity rates in one place.
Compare Annuity Rates →This content is for educational purposes only and does not constitute financial, investment, tax, or legal advice. Annuity products vary by carrier and state. Consult a licensed financial professional before making any financial decisions. AnnuitiesHQ.com does not sell annuities or provide investment advice.