Presumably an annuity provided through a 401(k) could be offered as one of many retirement payout options, much as TIAA-CREF offers annuities as a 403(b) payout plan. Those who like such things will find much to like about them.
The big annuity scam is in the agent-sold annuities where the fees are huge, the contracts are confusing, and the buyers are uninformed.
We just met with the TIAA rep last week. My wife insisted that one of her accounts in her 401K was an annuity. I had read what I could find out about it and couldn't figure out what it was, but it didn't quite seem like an annuity.
Thankfully it wasn't. It was a fund with a minimum payout (but lower earnings to compensate for the reduced downside risk), that *could be* annuitized (but wasn't). Thank God. I think we'll be moving the money out of it into something that will provide better long term growth.
I think annuities are right for some people, but if you want to provide a nest egg for your descendants, that's not a way to go about it.