One of the primary reasons many retirees seek out financial advice is to convert their savings into a steady stream of income that can support their current lifestyles for the rest of their days.

That’s why, to some advisors, the news this November that State Street Global Advisors launched a deferred lifetime income annuity within the University of California’s retirement plan could seem unsettling. That retirement plan has $35 billion in assets that advisors might not be able to manage if its 300,000 participants decide to keep their money in the plan’s annuity after they retire.

Deferred-income annuities are insurance contracts in which the buyer gives an insurer a lump sum in exchange for guaranteed lifetime income that begins at a later date. The new retirement plan annuities are attached to target-date asset-allocation funds, which invest a portion of investors’ assets in annuity contracts as the plan participant approaches retirement age.

State Street is not alone. This October, investment powerhouse BlackRock announced that five larger retirement plan sponsors, including the Tennessee Valley Authority and Advance Auto Parts , had signed up for its LifePath Paycheck annuity product as their plans’ default investment option for employees. Unlike State Street’s, BlackRock’s annuity can begin paying income as soon as employees retire. Other retirement-plan-focused financial groups, such as Income America and the National Professional Planning Group, have made similar announcements.

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