Global Defined Contribution Plans Face Retirement Income Challenge

Retirement income is identified as the foremost challenge facing defined contribution (DC) plan providers over the next decade, with 60% of organizations surveyed highlighting this concern according to the "Global Peer Study 2025" by the Thinking Ahead Institute. While many plans offer flexible drawdown options and some provide annuities and lifetime income products, most DC systems lack robust, standardized mechanisms to deliver income during retirement, particularly during the decumulation phase. Larger funds tend to provide soft default retirement income pathways, but balancing default options with participant choice remains difficult. Jessica Gao of the Thinking Ahead Institute explains that unlike defined benefit plans, where retirees had guaranteed income, DC plans transfer risk to individuals, making secured income provision a global challenge for decades. Additionally, alternative asset classes and private markets are increasingly discussed as potential supports for retirement portfolios. Meanwhile, a separate U.S. legal case under ERISA highlights difficulties in retirement benefits disputes, where a plaintiff's delayed attempt to amend a complaint about combined retirement benefit entitlements was denied due to unjustified delay and potential unfair prejudice to defendants.