Liquid alternative mutual funds are growing faster than any other segment of the $15 trillion mutual fund industry, according to Morningstar research. Assets rose to $285 billion in the first quarter of 2014. There are more than 500 alternative funds competing for investors' retirement money. To put their nascence in perspective: over half of those have been created since 2008.

Alternatives have been a staple of the defined benefit component of U.S. retirement industry for decades. Massive private and public sector institutional funds deploy alternatives, a category that involves a vast array of investment strategies, as a way to add diversification and hedge against risk to enhance portfolio performance.

A recent purvey conducted by Pimco's DC practice probed 49 consulting firms that serve 7,800 clients with aggregate DC assets in excess of $2.8 trillion. Nearly all of the consultants surveyed (98 percent) support or strongly support the use of alternatives in custom target-date funds. What those consultants are saying is clear: the biggest risk in alternatives is in not accessing them.