A new plan sponsor survey offers insights into the issues regarding retirement income adoption by workplace retirement plans. Service providers may find it instructive in anticipating and meeting plan needs.
More than a third of 212 plan sponsor respondents (37%) agree that solvency determination (i.e., evaluation of the annuity provider to ensure that its solvency is adequate to make all future payments to the annuitants(s)) is the most pressing issue that still needs to be addressed to ensure a workable safe harbor. According to the MetLife 2016 Lifetime Income Poll, this rises to 47% among those who are extremely or very familiar with the proposed amendments to the safe harbor.
Three-quarters (76%) of respondents say that in determining the adequacy of the solvency of a potential annuity provider for their defined contribution plan, they would prefer to be permitted to rely on certifications from the annuity provider based on the regulatory process carried out by a state insurance commissioner, rather than to conduct the solvency due diligence process themselves as part of their regular due diligence process for plan providers.