By Tim Grant
Pittsburgh Post-Gazette
(TNS)
Feb. 8 — Seven years after Congress gave employers the green light to add lifetime income options to 401(k) plans, adoption remains more of a crawl than a sprint.
Dan Tatomir, a 25-year retirement industry veteran who leads the retirement plan practice at Fragasso Financial Advisors’ South Hills office, says that’s no surprise.
While the Secure Act of 2019 now requires plans to show participants what their balances translate into as monthly income for life, turning that illustration into real-world behavior is another matter entirely.
Participants may fear outliving their savings, but shifting from a lump-sum mindset to an income-for-life mindset—while juggling the trade-offs around losing flexibility of their savings, the inflation risk of a set income and the challenge of transporting their income plan from one company to another—is no small leap.
In the Post-Gazette’s latest “In Conversation With” Q&A series, we sit down with Mr. Tatomir to unpack why lifetime income remains more promise than practice, and what it will take to move the needle.
Post-Gazette: Policymakers have long promoted lifetime income as the missing link between pensions and 401(k)s. From your perspective, how close are we to that vision becoming reality?
Mr. Tatomir: We’re closer than we were 10 or 15 years ago, but we’re still in the relatively early days.
The retirement plan industry has made real progress. Helping people save, automatic enrollment, better default investments and lower costs have helped people accumulate assets.
But helping people turn those savings into a paycheck in retirement is a newer challenge.
In practice, most participants still view their 401(k) as a lump sum, not as income. Shifting that mindset takes more than legislation.
PG: What’s your overall view of lifetime income products inside defined contribution plans—opportunity, risk or something in between?
Mr. Tatomir: It’s definitely something in between.
People are living longer, and one of the most common concerns I hear from participants is the fear of outliving their savings. Providing options for people to structure an income stream that can provide peace of mind and make people feel more confident about retirement is a real opportunity help.
At the same time, these products are complex. There are many different structures, each with trade-offs around cost, flexibility and access to money.
That complexity can be overwhelming if it isn’t explained well. I don’t think they are a default option for everyone.
Helping participants understand when a lifetime income option makes sense, and when it doesn’t, is just as important as offering the option itself.
PG: How significant is fiduciary liability when encouraging sponsors to adopt lifetime income plans as an employee benefit?
Mr. Tatomir: Fiduciary responsibility is a very real concern, and rightfully so.
Even with the Secure Act safe harbor, there’s still anxiety. Sponsors need to be confident they follow a prudent, well-documented process when selecting any lifetime income option.
What I tell sponsors is that fiduciary liability isn’t a reason to avoid lifetime income altogether, but it is a reason to be very deliberate.
You need strong governance, clear documentation of your selection process and robust participant education. This isn’t something you can just check a box on.
PG: From the participant side, what are the biggest barriers to understanding or trusting lifetime income?
Mr. Tatomir: Unfamiliarity is the biggest hurdle.
Many participants have never had a pension, so the idea of trading a portion of their savings for income can feel uncomfortable or risky. Annuities, in particular, carry a lot of baggage from years of being poorly explained.
Another challenge is language.
Industry terms don’t resonate with most people and they don’t naturally connect these products to their real-world goals of paying bills, maintaining their lifestyle or not becoming a burden on family.
Terms like “guarantees,” “income floors” and “benefit bases” mean very little to the average worker. Participants struggle to connect these products to their current situation and desired lifestyle in retirement.
PG: Portability is often cited as a hurdle. How well does a lifetime income workplace plan accommodate a mobile workforce?
Mr. Tatomir: Portability is still a challenge, even though it’s improving.
Some in-plan income options can be rolled to an IRA when someone changes jobs. But that doesn’t always mean the income feature can be moved into the next employer’s plan. That’s often where the confusion begins.
Most workers already end up with multiple retirement accounts over their careers. When each account has a different income option with different features and tradeoffs, it can quickly become overwhelming. Many plans weren’t originally designed to support partial withdrawals or monthly income payments, so updates may be needed before income options work smoothly.
PG: Where do you see the biggest disconnect between how lifetime income products are marketed and how they actually function?
Mr. Tatomir: The biggest disconnect is around trade-offs.
Marketing often emphasizes simplicity and guarantees while downplaying the loss of flexibility, liquidity constraints or inflation risk. Those trade-offs aren’t inherently bad, but they need to be clearly understood so the products can be used correctly.
For example, some products suggest that you can both access your money freely and receive guaranteed income, but in reality accessing principal may reduce or eliminate this guarantee.
That’s not necessarily a bad design. There’s logic to it. But it’s often not clearly understood upfront.
Inflation is another issue. Many income streams don’t adjust for inflation.
So, marketing might show an attractive monthly payment today, but 20 years into retirement, that payment’s purchasing power has eroded considerably.
PG: Should lifetime income be embedded in company plans, offered as an option at retirement or kept entirely outside the plan structure? Why?
Mr. Tatomir: I don’t think there’s a one-size-fits-all answer to that question.
Some participants benefit from having income features built into the plan earlier. It can make retirement more plannable and feel less daunting.
Others are better served by making those decisions closer to retirement, once their situation is clearer.
What matters most is flexibility and access to guidance.
Plans should support multiple approaches, systematic withdrawals and partial guarantees within the plan as well as outside solutions so participants can choose a path that aligns with their needs rather than being pushed into a single outcome.
Photo credit: JLGutierrez/iStock
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© 2026 the Pittsburgh Post-Gazette. Visit www.post-gazette.com. Distributed by Tribune Content Agency LLC.
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