The drivers

Consultants who advise some $4 trillion in DC plans say they are focusing on retirement income products in plans, T. Rowe Price found.
The passage of the Setting Every Community Up for Retirement Enhancement (Secure) Act is pushing more money into DC plans. Also, increasing regulation has pushed more advisors to become fiduciaries, which means they can advise on retirement plan accounts.
Convergence, or the large crossover where retirement firms have been acquiring wealth firms and vice versa, has been growing. Where there was a lack of retirement advice in DC plans, that is changing. Advisors on the wealth side have historically tried to get that DC money to roll over while advisors on the plan side want it to stay. Due to this M&A crossover, however, "more advisors are playing both sides of that coin," Doshier says.
Plan participants also see advantages of staying in a DC plan, largely that they get institutional advice and lower costs.
Plan sponsors weren't as eager to hold on to participants after retirement as they weren't set up for decumulation and potentially faced lawsuits due to benefits, rights and features clauses that held them back from developing specialized products for retired participants. Today, that is changing. Recordkeepers are smoothing out issues such as regular withdrawals from accounts. Although the risk of lawsuits is still there, there is more development of specialized retirement products. In addition, many of the fees on distributions have gone away, according to Doshier.

The buzz

Michael Doshier, lead retirement strategist, T. Rowe Price:

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Trendspotter: 401(k) participants are staying in plans after retirement

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