Press Coverage

NEPC's Ross Bremen was quoted in a recent article from P&I focused on key themes affecting the 401(k) space. Read the article below or on Pension & Investment's site here.

Changes made to the investment lineups of corporate 401(k) plans in 2018 reflect U.S. sponsors' ongoing focus on fee savings and fiduciary responsibilities, a Pensions & Investments analysis of recently released 11-K filings shows.

P&I analyzed reports filed between May 24 and July 25 with the Securities and Exchange Commission and found that 73 U.S. corporate 401(k) plans changed managers of at least one investment option. Those plans had assets totaling $243 billion and added a total of 171 new investment options from 52 managers in the year ended Dec. 31. Plans in that same universe removed 183 investment options from 61 managers during the same period.

Overall, the majority of fund changes involve equity investment options, data shows.

Among the 986 11-K filings observed over the period, 73% of changes were changes in equity options, while 10% involved fixed-income funds. Changes in target-date fund lineups accounted for 6% of changes, 4% in stable value funds and the rest in other asset classes.

In filings that provided such information, plans added 102 active funds and 57 passive funds and removed 109 active funds and 49 passive funds.

Defined contribution plan consultants say while no big surprises emerged in 2018, plans continued the trend of emphasizing fee savings and taking a closer look at their lineups in general.

Ross Bremen, a partner at investment consultant NEPC LLC, Boston, said that plans have been influenced in part by the raft of fee-related fiduciary lawsuits in recent years to examine their lineups more closely than in the past.

"There have been so many of these suits over time," he said. "It's been a variation on the theme, and so yes, to some extent fee levels themselves have been an issue."

"Even among passive managers, for example, there have been concerns about whether the cheapest fund available was in place (and) questions whether mutual funds should be used (or) cheaper collective trusts should have been considered when available."