A recent survey from Watson Wyatt finds the number of employers planning to offer annuities in their 401(k) plans is expected to grow as companies look for ways to provide workers with a steady distribution of benefits during retirement.
Nearly one in four employers (22 percent) that sponsor DC plans currently offer an annuity as a distribution option, and 10 percent of those who do not offer one are considering adding it, according to the survey.
"Annuities in 401(k) plans were rarely discussed a few years ago," said Robyn Credico, a senior retirement consultant at Watson Wyatt in a press release. "But in the recent economic downturn, employees without traditional pension plans could not retire because their 401(k) balances were decimated. With this weakness in 401(k) plans now exposed, more employers are exploring ways to minimize their employees' exposure to risk — including the use of annuities."
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