How In-Plan Annuity Sales Could Help Retail Advisors

Expert's perspective: Calvelli recently joined NFP after working for companies like Buck, Lockton and Creative Planning.

Nonprofit employers with 403(b) plans "have effectively adopted lifetime income products for years," Calvelli said.

Meanwhile, at employers with 401(k) plans, "for quite some time, we've seen a reluctance to adopt in-plan annuities," she said. "They are more complicated and can have more moving parts than typical investments or distribution options. Annuities have, in part, a branding problem, and most plan sponsors don't want to be the first to dive into the pool."

But Calvelli believes that in-plan annuity sales will grow over time.

NFP is tracking 13 in-plan annuity options, including nine that combine in-plan annuities with a target-date fund.

"We are trying to pivot the conversation around annuities toward the concept of solving for the risks in an individual's holistic financial plan," she said.

The best guides for both the sponsors and the employees will be retirement advisors with a thorough understanding of lifetime income planning, she predicted.

"Our advisors are first and foremost focused on helping individuals create a personalized financial plan," Calvelli said. "We look at guaranteed income as a component of fixed income within a well-diversified portfolio."

She sees putting assets in an annuitization option as a way to create the equivalent of a personalized pension.

"Making in-plan annuities more accessible to individuals through their workplace retirement plans is another way to democratize investing for all," she said.

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