Do you have misperceptions when it comes to something as important as “in-plan” guarantees for your employees?

A recent study found Plan Sponsors still hold key misperceptions as they consider adding in-plan guaranteed lifetime income solutions to their investment line-ups. This may be standing in the way of a smart solution for their participants.

Misperception vs. Truth

26% of Plan Sponsors are worried that fees associated with in-plan guarantee solutions passed on to employees are too high.

Truth:  The overall cost is typically lower than similar investment options offered outside the plan. That’s because they’re offered within a group retirement plan where the participant benefits from reduced expenses.

23% of Plan Sponsors are concerned that in-plan guarantee solutions are too complex.

Truth: Many of these solutions are structured as a target date fund held within a collective investment trust. This offers a simplified experience that can provide access to growth potential while offering guaranteed lifetime income.

32% of Plan Sponsors are concerned that administrative costs associated with in-plan guarantees are too high.

Truth:  While there is some additional work applying existing fiduciary standards in the evaluation and adoption of these solutions, generally there is no explicit cost for Plan Sponsors.

29% of Plan Sponsors are concerned about increased fiduciary responsibility associated with in-plan guarantees.

Truth:  The SECURE Act of 2020 provides new safe harbor guidelines which helps protect Plan Sponsors from fiduciary liability related to the selection of guaranteed lifetime income, when followed.

15% of Plan Sponsors believe their employees are not interested in guaranteed lifetime income investment options.

Truth: According to the survey, 46% of participants are interested in a guaranteed lifetime income investment option and 8 in 10 are at least somewhat likely to rollover a portion of their current retirement savings into one.

Schedule a meeting today to learn more about these common misperceptions and the facts Plan Sponsors should know when considering in-plan guarantee solutions.


Survey Methodology: Edelman Data and Intelligence (DxI) conducted the online survey on behalf of Nationwide July 19-August 4, 2021. Respondents included: 500 company plan sponsors, including business executives, business owners, human resources professionals, and financial management professionals who are full-time workers at U.S. businesses with at least 10 full-time employees who are decision-makers for company retirement plans including 401(k), 403(b), or 457(b) plans;1,000 plan participants 45+ years of age who work full-time and have access to a 401(k), 403(b), or 457(b) plan through their employer. This material is not a recommendation to buy or sell a financial product or to adopt an investment strategy. Investors should discuss their specific situation with their financial professional. This information is general in nature and is not intended to be tax, legal, accounting or other professional advice. The information provided is based on current laws, which are subject to change at any time, and has not been endorsed by any government agency. Guarantees are subject to the claims-paying ability of the issuing insurance company. Nationwide Investment Services Corporation (NISC), member FINRA, Columbus, OH. Nationwide Retirement Institute is a division of NISC. Nationwide, the Nationwide N and Eagle, Nationwide is on your side and Nationwide Retirement Institute are service marks of Nationwide Mutual Insurance

For Plan Sponsor Use Only – Not for Use with Participants or the General Public

This information is not intended as authoritative guidance or tax or legal advice. You should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.

An investment in a target date fund is not guaranteed at any time, including on or after the target date, the approximate date when an investor in the fund would retire and leave the workforce. Target date funds gradually shift their emphasis from more aggressive investments to more conservative ones based on the target date.

Guarantees are based on the claims paying ability of the issuing insurance company.

Study performed by Nationwide Retirement Institute®

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