Guaranteeing A Secure Retirement – A Practical Guide For Selecting DC Plan Lifetime Income Options

When Congress first passed legislation to create "cash or deferred arrangements" - the original term for 401(k) plans - few people could have predicted that, over the course of a single generation, DC plans would come to dominate the private retirement system. The first generation of DC plans were largely considered supplementary to pension plans and were crude by today's standards. However, over the years, DC plans have undergone a remarkable transformation as policymakers, employers, and labor organizations have worked to improve outcomes for participants.

Today, more people are participating in DC plans than ever before thanks to the proliferation of automatic enrollment and efforts to expand coverage. DC plans have also become considerably more transparent, professionalized, and efficient. However, most of the systemic improvements have focused on helping participants accumulate assets and not on the distribution phase of the participant life cycle.