NEPC’s Mikaylee O’Connor was recently quoted in a Pensions & Investments article discussing what defined contribution executives can do in 2025, despite some uncertainty. View excerpts below or read the full article on the Pensions & Investments site here.
As 2025 portends to be filled with political, legislative and regulatory uncertainty, defined contribution plan executives are focusing on what they can do and should do — rather than what might happen.
“Uncertainty creates inaction,” said Mikaylee O’Connor, head of defined contribution solutions at NEPC.
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Managed accounts will come under greater scrutiny by sponsors, predicted NEPC’s O’Connor, noting that participants’ willingness to provide detailed financial information is crucial to this feature’s success.
“The big focus is on the managed account provider to make sure managed accounts are understood (by participants) and adding value,” she said.
ERISA lawsuits against sponsors offering managed accounts “has caused a cooling effect or an inquiry effect,” she said. The primary complaint is that managed account fees are excessive.
“The main concern of sponsors is the need for participant input,” she added. “If participants aren’t engaging, then they are paying high fees” compared to a target-date fund.
O’Connor said she expected “a lot of pressure” on managed account providers to reduce fees.
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O’Connor noted that industries with frequent turnover make it hard for those sponsors to plan for lifetime income products. “Employee tenure is a structural challenge,” said O’Connor, agreeing that portability is a big issue.
Click here to read the full article on the Pensions & Investments site.