Many defined contribution (DC) plan sponsors are expanding their focus on the retirement needs of their plan participants in the decumulation phase and are realizing that there is no one-size-fits-all solution – whether for their retirees or for the DC market as a whole. As plan sponsors explore the many alternatives, they should consider taking a series of steps towards improving retirement outcomes for their plan participants, rather than focusing on just one solution, said Josh Cohen, Managing Director and Head of Institutional DC for the Institutional Relationship Group at PGIM, the asset management business of Prudential Financial. “Retirement income in DC plans will be evolutionary, not revolutionary,” he added.
While many plan sponsors are saying they are interested in lifetime income solutions, they also note that it’s a complicated area with many hurdles. “The lesson is there isn't a magic bullet product that you can just select that’ll allow you to say, ‘I'm solving for lifetime income,’” Cohen said.