When thinking about how to address the decumulation phase of retirement saving, plan sponsors have several options to offer guaranteed retirement income products through an insurance company. However, plan sponsors also have the option to offer Non-Guaranteed Retirement Income Payout (NGRIP) solutions to plan participants, which shift investment and longevity risk to the retiree.

Both guaranteed and non-guaranteed payout options have pros and cons. Retirees may prefer NGRIPs over guaranteed income options due to flexibility and lower costs, according to the Institutional Retirement Income Council, which recently published a paper about NGRIPs.

The underlying investment portfolio can use the same investment options available under the accumulation stage of the plan or the plan can make other investment options available. Typically, different options are offered with different investment risk profiles, said IRIC. The retiree generally has access to the account balance at any time and at death, any remaining balance is payable to the retiree's designated beneficiary.