Allianz Finds Growing Interest in Annuities in Employer-Sponsored Retirement Plans

According to a recent study conducted by Allianz Life Insurance Co. of North America, there is growing interest from participants in including annuities as part of employer-sponsored retirement plans, such as 401(k)s.

Over the past few years, interest in annuities has increased significantly, Allianz found. The study revealed that nearly 68% of respondents expressed a desire for more information about incorporating annuities into their retirement plans, up from 62% in 2022 and 56% in 2021. Furthermore, 67% of participants stated they would consider adding an annuity to their plan if it were available, compared to 60% in 2022 and 59% in 2021.

“Americans are eager to have their plan sponsors add a guaranteed lifetime income option such as an annuity as part of their employer-sponsored retirement plan,” Matt Gray, head of employer markets at Allianz Life, said in a statement. “In today’s economic environment, adding an annuity to a portfolio can help mitigate risks to a retirement strategy and improve outcomes.”

Growing Interest

The growing interest in annuities comes as Americans increasingly depend on employer-sponsored defined contribution retirement plans to secure their retirement, according to Allianz.

More than three-quarters (77%) of respondents indicated that having an option to establish a protected foundation for lifelong income would enhance their loyalty to their employer, compared to 74% in 2022 and 65% in 2021.

Additionally, 72% of Americans anticipate that a significant portion of their retirement income will come from their employer-sponsored plans. Meanwhile, 66% of respondents are concerned about depleting their retirement funds during their post-employment years.

New Offering

On Wednesday, Nationwide Mutual Insurance Co. furthered its commitment to annuities with a new lifetime income annuity, Nationwide Defender Annuity, which offers customized growth potential and investment protection. This marks Nationwide’s second product offering in what it calls a “rapidly growing” sector, though not an in-retirement plan option. Registered index-linked annuity sales have surged from $1.9 billion in 2014 to exceed $41 billion in 2022, according to the firm.

The new annuity allows investors to tailor their strategy with a term of one, three or six years to fit their investment goals. It features five different index investment options offering upside potential and customization to fit a broad range of investment objectives.