The plan sponsor playbook : How to meet participants where they are on the road to retirement income

Every July, Bobby Bonilla receives a seven-figure check from the New York Mets, even though he last played for the team in 1999. The payment comes from a contract he agreed to defer decades ago. The appeal is easy to understand.

Helping employees understand retirement income has never been easy. As guaranteed income options become more widely available in defined contribution plans, sponsors face a harder challenge: helping participants understand how guaranteed income could fit into their retirement plan well before they need to make a decision.

Key takeaways

1. A simple story does what a product brochure cannot. Bobby Bonilla’s deferred-income deal explains guaranteed income in seconds, delivering the comprehension that participant education on annuities has been missing.
2. The retirement journey has stages, and education should follow them. Planting income concepts early, reinforcing them mid-career, and reframing at late career gives participants time to understand their options before the decision turns urgent.
3. Education belongs inside plan design. Sponsors who see real engagement build participant literacy into how the plan works. Without a framework for turning savings into income, even the strongest product lineup falls flat.

A guaranteed stream of payments, in one story

Every first of July, Bobby Bonilla gets a check from the New York Mets for $1,193,248.20, despite having last played for them in 1999. He will keep getting it until 2035, when he turns 72, by which point a $5.9 million buyout negotiated in 2000 will have paid him $29.8 million.¹³

Most people who hear the story see the value immediately. Defer the money, let it compound, receive a predictable stream of payments over decades, without direct market exposure. That is what guaranteed income can feel like when it is built into plan design and working as intended. The trouble is that most retirement savers have never been given a way to picture it that clearly.

Plan sponsors now have a wide range of tools to make that income real for employees. SECURE 2.0 clarified or removed a number of administrative barriers to adding lifetime income options, and in September 2025 the DOL issued guidance opening a path for lifetime income solutions to qualify as default investment alternatives. Recordkeeper availability has expanded sharply: 77% of recordkeepers now offer at least one annuity product, and fixed index annuity availability has more than doubled since 2024.¹⁴ Three in four DC plan sponsors expect demand for in-plan annuities to grow significantly over the next five years.¹⁵

More retirement income solutions are available today than ever before. The regulatory runway is positive, and participants want lifetime income in their retirement plans (see our Participant Perspectives article in this edition of next). What remains is the work of helping them visualize the role lifetime income plays across the retirement journey. Moving from saving to spending is a genuinely difficult transition, and breaking it into something easy to conceptualize is a challenge many sponsors and their advisors have yet to solve.

Retirement as a series of decisions

Retirement can be overwhelming for participants because, frankly, they probably haven’t done it before. What income sources do I have? In what order do I draw them? What are the tax implications? How much can I spend? What happens if I live longer than planned? How do I protect against a bad market in the first years of retirement? Every one of these is its own education challenge, often involving a range of advisors. For employees, simply knowing which question to address first, while also navigating the emotional shift from working life to retired life, can be a significant hurdle.

The sponsors getting this right treat each stage of the journey as its own education moment. Instead of a single retirement communication, they build a sequence across the working career that raises the complexity of the material over time and surfaces the relevant decision at each point.

The instinct across financial services is to front-load employees with disclosures and materials so that everything they might need to know is immediately available. It can be far more productive to treat the first explanation as an entry point. Behavioral research bears this out: a 2025 NBER study found that when participants could see a guaranteed income decision in the context of their broader retirement picture, rather than as a standalone product choice, take-up increased substantially.¹⁶ The barrier was framing that overcomplicated the picture. As participants grow more familiar with lifetime income, complexity can be layered in over time, deepening understanding and leading to better-informed outcomes.

What this means for plan design

Only 37% of plan sponsors say they can clearly articulate the value of annuities to participants.¹⁵ That matters because sponsors set the tone for participant education. If the people designing the plan cannot explain how a participant turns savings into guaranteed income, the communications they produce won’t either. A few practical steps can help.

• Start the conversation earlier than feels necessary. Most participant education on income begins too close to retirement, once habits are set and the risk of a rushed, poor decision is high. Introducing income concepts at enrollment, and returning to them at key career milestones, builds the mental scaffolding that makes the retirement decision clearer when it arrives.
• Lead with stories, then support them with data. Bobby’s story works because it doesn’t ask employees to evaluate a product; it asks them to recognize a good outcome. Once they see that outcome as a goal, the product explanation follows naturally.
• Treat the journey as segmented. A single annual email about retirement income reaches everyone equally and no one effectively. Real engagement comes from delivering the right message at the right career stage, with each one building on the last.

Abstract education creates awareness; concrete tools such as income projections, scenario illustrations and clear side-byside comparisons help participants act on it. SECURE 2.0 and the evolving QDIA guidance have given sponsors more design flexibility than they have ever had, and that flexibility becomes valuable once your employees understand what to do with it.¹⁷

The case for acting now

Twenty-six percent of retirees say not purchasing an annuity is one of their biggest financial regrets.¹⁸ The difficulty is reaching people early enough to act, and before the window closes.

The participants in a plan today still have time to make these decisions. What many of them lack is a plan sponsor who has built the journey, step by step, to get them there.

Bobby Bonilla had an agent who understood the time value of money, the power of guaranteed income and how to negotiate on his client’s behalf. He made one good decision, at the right moment, with the right guidance. Most retirement savers can face a similar choice, provided their plan sponsor has done the work to make each step of the journey clear and simple for them.