Published April 15, 2026 by the AnnuityJournal Editorial Team.
WASHINGTON, D.C. – The American Council of Life Insurers (ACLI) is pressing Congress and regulators to expand access to lifetime-income annuity options inside 401(k) and other employer-sponsored retirement plans. The industry trade group argues that current plan design conventions leave most private-sector workers without any easy path to convert their retirement savings into a pension-style income stream.
The ACLI’s renewed push builds on provisions already written into the SECURE Act (2019) and SECURE 2.0 Act (2022), which lowered the legal and administrative barriers for employers to offer guaranteed income annuities as investment options inside 401(k) plans. Despite those changes, plan sponsor adoption has been slow. Industry surveys suggest fewer than 10% of 401(k) plans currently include an in-plan annuity option, well below what proponents say is needed to address the widening U.S. retirement income gap.
The Retirement Income Problem
Traditional employer pensions once handled the job of converting retirement savings into monthly lifetime income for most private-sector workers. Today, the defined contribution 401(k) model dominates, shifting responsibility for income-generation onto the individual retiree. Most retirees have no built-in mechanism to translate a lump-sum account balance into a reliable paycheck that lasts for life.
An in-plan annuity option would address that gap directly. Workers could allocate a portion of each paycheck into a guaranteed lifetime withdrawal benefit (GLWB) contract or similar income-focused annuity inside their 401(k), accumulating a protected income base over their working years. At retirement, the worker can activate lifetime withdrawals without having to shop the retail annuity market from scratch.
What SECURE Act Changes Already Allow
Both the original SECURE Act and SECURE 2.0 made three technical changes that matter for in-plan annuities:
- Fiduciary safe harbor. Employers are shielded from fiduciary liability for the selection of an insurer, provided they follow a reasonable due-diligence process focused on financial strength and cost.
- Portability. Workers can roll an in-plan annuity out of a 401(k) into an IRA without triggering surrender charges if the plan drops the product.
- RMD and annuitization rules. SECURE 2.0 expanded the dollar and percentage limits on qualified longevity annuity contracts (QLACs), which allow deferral of required minimum distributions until age 85.
For buyers considering a QLAC or in-plan annuity, our QLAC explainer and 401(k)-to-annuity rollover guide walk through the mechanics.
Industry Players and Products
Several major carriers already offer in-plan annuity solutions designed for retirement plan platforms, including Prudential, Transamerica, Lincoln Financial, and TIAA. Nationwide and Empower also distribute in-plan annuity wrappers paired with target-date funds, a structure designed to make the allocation decision automatic for workers.
The ACLI is particularly focused on getting more mid-size and small-business 401(k) plans to adopt in-plan annuity options. Adoption has been concentrated at large employers so far, leaving roughly half of the private-sector workforce without access.
Remaining Barriers
Even with the SECURE Act protections, plan sponsors cite three recurring concerns. First, annuity product complexity; guaranteed withdrawal benefit riders and index-linked crediting are harder to explain in participant disclosures than traditional mutual funds. Second, cost; in-plan annuity wrappers typically carry higher all-in fees than standalone target-date funds, which can raise ERISA cost-reasonableness questions. Third, recordkeeping; integrating annuity contracts into 401(k) recordkeeping platforms is a non-trivial technical lift.
The ACLI is lobbying for additional regulatory guidance from the Department of Labor and IRS to address each of these concerns.
What This Means for Workers and Retirees
For workers already in a 401(k) plan that does not offer an in-plan annuity, the most practical path to guaranteed lifetime income is to roll a portion of a 401(k) balance into an annuity at or near retirement. That can be done tax-free via a direct rollover into an IRA annuity. For context on how that works, see our 1035 exchange guide and 401(k)-to-annuity rollover walkthrough.
Buyers should be particularly careful to compare payout rates. A $500,000 balance can generate $100 to $400 per month more in lifetime income depending on which carrier quotes the deal. Top SPIA carriers for April 2026 include Mutual of Omaha, New York Life, and MassMutual.
Related Reading
Sources: American Council of Life Insurers (ACLI); SECURE Act 2.0 statutory text; U.S. Department of Labor guidance on in-plan annuity options.
