The Guaranteed Lifetime Income Gap: Access Must Catch Up to Demand

Drew Maresca

For years, guaranteed lifetime income solutions occupied an odd corner of the defined contribution  industry. They have been widely discussed, yet rarely adopted. That dynamic appears to be shifting, and employers waiting for proof of demand are receiving more data to support rolling out solutions.

Just 22% of pre-retirees reported having access to an in-plan GLI solution, according to a 2026 survey from the Defined Contribution Institutional Investment Association Retirement Research Center that is supported by other RRC research. That figure alone might suggest a market still finding its footing. But 56% of pre-retirees with access to GLI solutions reported actively investing in them, and 16% said they plan to invest in them in the future. Together, this suggests that more than 70% of pre-retirees will use GLI in coming years. Furthermore, 57% of pre-retirees without access to GLI reported a desire to invest in these solutions.

That combination of findings deserves a moment of reflection, because it inverts a familiar assumption in DC plan design. Employers have traditionally waited for participant demand, especially regarding GLI solutions, and a perceived lack of it has been seen as a central obstacle to offering them. This new RRC survey tells a different story: The real obstacle may be access, not demand.

Access Still Lags

When available, participants report selecting GLI solutions at rates that would make almost any other plan feature look like a runaway success. Even if these findings are skewed due to a poor understanding among the surveyed population of investment options and features, they still communicate a preference for guaranteed income.

While access at the plan level remains low, the availability of GLI options from recordkeepers has grown considerably. A separate 2026 RRC survey found that 77% of leading recordkeepers now offer at least one type of in-plan GLI solution, up from 61% in 2024. That is a meaningful build-out of infrastructure in a relatively short period, and it signals that recordkeepers understand the considerable demand for guaranteed income, making the likelihood of GLI solutions on plan menus all the greater.

Perhaps more telling is the outlook: 64% of recordkeepers said they believe participant adoption of GLI solutions will increase over the next two years. In other words, the stakeholders tasked with building and administering these products are preparing for growth, and they expect solutions to be made available to participants sooner than later.

On the Move

While GLI solution availability from recordkeepers is not the same as availability from employers, the momentum is favoring GLI solutions. The Setting Every Community Up for Retirement Enhancement Act of 2019 and the SECURE 2.0 Act of 2022 reduced a good deal of regulatory friction associated with offering annuity-based options inside DC plans. That, mixed with the growing demand and an ever-increasing number of GLI solutions to choose from, may translate to more employers offering access.

For employers and their plan consultants and advisers, all of this points to an opportunity.

The traditional hesitations in adopting GLI solutions—fiduciary complexity, portability concerns, and participant confusion—have not disappeared. But there is a growing body of evidence suggesting that participants who are offered access to these solutions do not need aggressive persuasion to adopt.

None of this means every plan should rush to add a GLI solution without careful evaluation. Fiduciary due diligence on insurer selection, fee structures and product design still matters tremendously, and employers should continue approaching it cautiously.

One additional and important caveat should be considered, as well: education. Sixty-one percent of pre-retirees with access to a GLI solution who chose to forego investing reported doing so due to a lack of product understanding, by far the most common reason for not investing. Thus, while research indicates a growing demand for GLI solutions, as well as an increase in availability from recordkeepers, a well-rounded education campaign should not be overlooked.

Considering that retail annuities are often sold and not bought—meaning that education is being delivered by financial advisers throughout the sales cycle—employers may look to introduce GLI solutions to their employees with a similar emphasis on education.

Employers can share key information with age-appropriate participants in a range of formats with the goal of multiple touchpoints and conversations per participant to ensure a true grasp of underlying concepts.

Either way, as participants approach a retirement period that may last longer than expected, and with the prospect of a less-than-certain Social Security paycheck, there could be even more demand for guaranteed income. Thus, given the number of participants rapidly approaching retirement, the more pressing question may soon become how quickly employers can meet the growing demand for GLI solutions.

Drew Maresca is the vice president of research at the DCIIA Retirement Research Center.

This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of ISS STOXX or its affiliates.