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TDFs still the darling of DC plans, but could guaranteed income options make inroads?

NEPC said it expects guaranteed income solutions and ESG investments to make progress, albeit slowly, in response to regulatory developments. 

By Kristen Beckman | February 23, 2022 at 04:24 PM
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Nearly all defined contribution (DC) plans use target funds as their default investment option, and about 44 percent of plan assets were invested in TDFs in 2021, up from 28 percent in 2011. This is according to the latest version of NEP’s annual Defined Contribution Plan Trends and Fee Survey.

NEPC, an independent, research-driven investment consulting firm, studies DC funds each year, including plan investment trends, features, and innovations across major sectors, and how these plans have evolved over the years. The 2021 survey studied 137 DC plans with $230 billion in aggregate assets and 1.6 million participants. About two-thirds of the plans studied were corporate plans, while one-fourth were health care plans and 8 percent were not-for-profit plans. The average plan had $1.7 billion in assets and 12,200 participants.

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