NEPC’s Alison Lonstein was quoted in a recent InvestmentNews article to discuss our 2022 DC Plan Trends and Fee survey results which show a lack of industry consensus on how to create meaningful retirement income solutions in companies’ defined-contribution plans. View the announcement on InvestmentNews’ site here.
The booming retirement income market seems to be befuddling defined-contribution plan sponsors.
According the recently released NEPC Defined Contribution Plan Trends and Fee Survey, there’s almost no industry consensus on how to create meaningful retirement income solutions in employer plans even as the market for those solutions has skyrocketed. In fact, the report revealed that choosing a retirement income solution has proven to be a major pain point for many defined-contribution clients.
The investment consultant and OCIO provider’s data showed that 84% of plan sponsors who responded to the survey currently offer their participants a retirement income solution, generally in the form of a target-date fund that includes the flexibility to take installment withdrawals in retirement. Currently, an overwhelming 96% of respondents offer TDFs, which is unchanged from 2020, with 46% of total plan assets invested in TDFs, up from 42% in 2020, according to the study.
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“As participants continue to demand retirement income solutions, plan sponsors are seeking trusted stewards to help them simplify what’s become a pretty complex evaluation and selection process,” Alison Lonstein, principal and senior consultant on NEPC’s defined contribution team, said in a statement.
Lonstein added that this trend mirrors the action in other segments of the retirement space, especially in the ESG and legal environments, where she’s seen a “significant uptick in clients asking for fiduciary training on the ESG landscape and requests for more insight and intel around legal news.”
Read the full article on InvestmentNews’ website here.