At retirement, participants in 401(k) plans enter the distribution—or “spend-down” —phase during which they typically use their savings to meet their retirement needs. Typically, participants can choose to take a payment of their entire account balance, referred to as a “lump sum” payment, or they can roll their account over to an Individual Retirement Account (IRA) to preserve tax advantages on their savings. In contrast, defined benefit plan (DB) participants must be offered an annuity, though a lump sum payment can also be offered. Participants who receive lump sums generally must decide on their own how best to make their money last throughout retirement. Some participants have access to products and services through their plan that can help them turn their savings into a retirement income stream. In 401(k) plans, these generally fall into two categories: Withdrawal options are a series of fixed or variable payments from a participant’s account. Participants may be able to set monthly payments as a fixed dollar amount, a percent of their account balance, or according to systematic withdrawal strategies designed— but not guaranteed—to stretch their savings over a set period of time or for life. Annuities are guaranteed payments, normally purchased through a contract with an insurance company for either a set period or for the participant’s life. Annuities come in a variety of forms. For example, deferred annuities enable the participant to delay the start date of payments until as late as age 85. Under the Internal Revenue Code (IRC), plan sponsors must comply with required minimum distribution (RMD) provisions under which participants age 70 ½ or older in 401(k) plans must receive minimum annual payments from their plan savings based on their account balance and remaining life expectancy. Plan sponsors may have their service provider, such as their record keeper or a third party administrator, administer RMDs by calculating and issuing payments to plan participants (see fig. 1). Typically, participants age 70 ½ or older who have not self- initiated withdrawals will automatically receive payments administered by their record keeper or third party administrator pursuant to RMD calculations. For participants who make insufficient withdrawals, the record keeper will typically issue payments for the amount of the difference to meet RMD requirements. Participants may face various risks as they enter retirement, some of which are new and different from those they may have become accustomed to as they accumulated savings. For example, as shown in figure 2, during both their working and retirement years participants may face the risk that poor investment returns will lead to lower than expected savings and the risk that inflation may erode the value of their savings as prices rise. Additionally, poor investment returns just prior to or just after retirement can substantially affect how long their savings will last. This is known as “sequence of returns” risk and it can have a serious effect on retired participants who have less ability to make up for lost of savings through increased contributions or longer employment. Participants who use a portion of their savings to purchase an annuity face the risk that low interest rates at the time of their purchase will negatively affect the amount of guaranteed income they can secure. Later in retirement, participants may also face cognitive decline that affects their ability to manage their savings. In retirement, participants also face “longevity” risk; that is, the risk that they will outlive their retirement savings. Longevity can be particularly challenging for participants because it poses the overarching risk that the longer a participant lives in retirement, the greater that participant is exposed to other retirement risks. For example, increased longevity can mean that there is a greater range of potential future investment outcomes and a longer period over which inflation may erode the purchasing power of available savings. Figure 3 may partially reflect the effects of longevity risk, as those over 75 are more likely to find themselves near or below the poverty line. Plan sponsors may hire companies to provide services and products that help participants use their savings to generate lifetime income and achieve other retirement goals. As shown in figure 4, service providers, such as legal counsel and investment advisers may help plan sponsors select appropriate lifetime income options for their participants. Record keepers play a particularly important role with respect to in-plan lifetime income options. They both administer withdrawal options for participants and build and maintain the record keeping platforms on which annuities are sometimes made available for plan sponsors to adopt for their participants. Plan sponsors may also contract with one service provider to provide multiple services to the plan. For example, a plan might contract with a record keeper that is also an insurance company providing both record keeping and annuities for participants, among other services. As of December 31, 2014, 401(k) plans represented more than $4 trillion in assets, nearly 500,000 plans, and more than 60 million participants. As shown in table 1, small defined contribution (DC) plans—those with less than $10 million in assets—represent about 95 percent of DC plans while large plans—those with assets greater than $200 million—make up a majority of assets and participants. We previously reported that other nations with account-based retirement systems have taken steps to help participants develop a lifetime income strategy. Five of the six countries we reviewed generally ensured that participants could choose among a lump sum, a withdrawal option, or an annuity. All six developed innovative approaches and strategies to help mitigate the financial risks participants face in securing adequate retirement income. EBSA is the primary agency responsible for protecting pension plan participants from misuse or theft of their pension assets as specified under Title I of the Employee Retirement Income Security Act of 1974 (ERISA). Other statutory provisions applicable to 401(k) plans, such as minimum distribution requirements, are also set out in the Internal Revenue Code. ERISA is generally enforced by DOL’s EBSA, while Treasury’s IRS enforces applicable provisions of the Internal Revenue Code and is responsible for determining if plans qualify to receive preferential tax treatment. Treasury’s Office of Tax Policy develops and implements tax policies and programs and reviews regulations and rulings to administer the Internal Revenue Code. State insurance regulators are responsible for enforcing state insurance laws and regulations, which typically involves reviewing insurance products and their rates and examining insurers’ financial solvency and market conduct. To carry out its responsibilities, EBSA issues regulations and guidance; investigates complaints involving plan sponsors, fiduciaries, and service providers; seeks appropriate remedies to correct legal violations; and pursues litigation when it deems necessary. As part of its mission, DOL is also responsible for assisting and educating plan sponsors to help ensure the retirement security of workers and their families. Title I sets standards of conduct and requires accountability for the people who run or provide investment advice to plans, known as plan fiduciaries, and requires administrators to provide participants with certain disclosures, including periodic benefit statements as well as summary plan descriptions. In recent years, DOL and Treasury have taken a number of steps to protect beneficiaries by attempting to help plan sponsors and their providers offer lifetime income options. For example: In 2008, EBSA promulgated a “safe harbor” that describes actions plan fiduciaries can take to satisfy their fiduciary responsibilities when selecting an annuity provider. In 2010, Treasury and EBSA published a request for information (RFI) on expanding lifetime income options in 401(k) plans and received 793 submissions. In 2012, IRS explained how a plan sponsor with both a defined benefit plan and a defined contribution plan (such as a 401(k) plan) can allow participants to use their defined contribution account balance to increase their defined benefit plan life annuity payments. In 2013, EBSA published a notice that it was considering a proposal requiring participant benefit statements to include an illustration of 401(k) account balances as a stream of lifetime income payments. In 2014, IRS amended finalized a rule to allow for the use of qualifying longevity annuity contracts (QLAC) in 401(k) plans, and it amended its RMD regulations to provide for specified annuities beginning payments after the participant reaches age 70 ½ to not be included when calculating RMDs. That same year, EBSA and IRS also clarified how a deferred annuity—an annuity that makes payments that begin in the future rather than at the time of purchase—can be included in a target date fund (a common default investment used by 401(k) plans). DOL, Treasury, and the Administration have also taken steps that may help participants implement a retirement strategy. On April 8, 2016, DOL promulgated regulations that treat as a plan fiduciary anyone who furnishes investment advice or recommendations to an employee benefit plan, plan fiduciary, plan participant or beneficiary, IRA or IRA owner; establishes that such investment advice must be in the best interest of participants; and provides for participants to hold those who furnish them investment advice to account under ERISA. Furthermore, in an action that could have an impact on those participants who do not make decisions about their 401(k) account, in September, 2015, President Obama issued a Behavioral Science Insights Policy Directive to encourage the design of government policies that better serve the American people. The President noted that automatic enrollment and escalation in retirement savings plans have made it easier for Americans to accumulate retirement savings, and he called for federal agencies, applying behavioral science insights, to give particular consideration to the selection and setting of default options when individuals are presented with choices. Record keepers reported that most plans covered by the questionnaire did not offer withdrawal options, which unlike annuities, are 401(k) plan account distributions that may be designed, but are not guaranteed, to last for life. In addition to providing lump sums, record keepers reported that roughly a third of plans covered by our record keeper questionnaire adopted some form of a withdrawal option, including installment payments, systematic withdrawals, or managed payout funds. We sent a questionnaire to a non-generalizable sample of plan record keepers that represented about a quarter of the 401(k) plan market at the end of 2014.