20%: DC plans with professionally managed accounts that have a drawdown feature.
Even though the money management industry has created a host of products for plan participants nearing retirement and receiving payments in retirement, just one in five plans are using professionally managed accounts with a drawdown feature, according to Aon Hewitt. What’s more, only another 8% are very likely to add it in 2014. With this feature, the provider can allocate participant assets for income and manage the annual amount paid from the plan.
Plan sponsors and their advisors can review the newest and latest features in a plan checkup and decide which ones can be the most helpful to participants. According to the Aon study some plan sponsors will include offering annuity or insurance products, and, as an option upon retirement, facilitate buying annuities outside of the plan.