Many of these are valid drawbacks to an option that could otherwise provide retirement savers with a lifetime income option, despite a growing move on behalf of the government to encourage their use—including a rule issued by the Department of Labor in 2014 on cutting the risk for longevity annuities; 2015 guidance from the DOL on the fiduciary issue; and a report from the Trump administration recommending an expansion of choice regarding annuities within retirement plans.

But annuities aren't very portable, thanks to complex insurance contracts, which hinders employees moving from job to job in moving such investments.

It's also tough to move in-plan annuities to a new service provider, and they're more expensive than other plan investments—and that's despite the fact that annuities chosen by plan providers are likely to be less expensive than what a participant could purchase on his own. Less expensive can still be costly compared to other options.

And while some companies have successfully added them—such as United Technologies, which worked with service providers to design annuity products specifically for its plan—that doesn't mean that smaller employers will be equally successful in working out all the kinks when adding such an option.

In addition, target-date funds that include annuities, according to 2016 DOL informal guidance, don't provide enough liquidity for participants to allow sponsors to use them as qualified default investment alternatives for participants who are automatically enrolled.

But all that doesn't mean employers can't help in other ways; the report says that the Callan survey revealed that almost as many employers as those offering annuities instead helped retiring employees who wanted to roll over 401(k) assets into an annuity outside their plan by putting them in touch with annuity placement services last year—8 percent, up from only 3.8 percent in 2016.