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As the possibility of alternative assets in defined contribution plans moves ahead, DC consultants and advisors are considering how they could be implemented, with many expecting custom or off-the-shelf target date solutions to become the primary vehicle, according to a T. Rowe Price survey.
President Donald Trump recently signed an executive order paving the way for alternative assets, including private equity, real estate and cryptocurrency, to be included in 401(k) retirement accounts. Private assets are among several evolving trends DC consultants and advisors are contemplating.
“Results from the 2025 DC Consultant Study depict an industry poised for change,” said Jessica Sclafani, Global Retirement Strategist T. Rowe Price. “We see this reflected in consultants’ and advisors’ evolving views on private assets in DC plans, to their consideration of target date solutions that can support participants in both the savings and spending phase, and to exploring the role of managed accounts and advice.”
Consultants and advisors surveyed increasingly expect private credit and private equity to be incorporated into DC plans over the next 12 to 24 months. When asked what barriers to implementation they might encounter, 72% said fees, 44% said liquidity concerns and 39% said operational complexity.
Meanwhile, retirement income services and products have been gaining traction, although the landscape has become increasingly complex, the survey found. More clients have opinions on retirement income than they did four years ago, consultants and advisors said. Systematic withdrawal is the preferred feature for delivering income to retired DC plan participants, followed by target date solutions that incorporate retirement income, such as partial annuitization or a managed payout capability.
Managed accounts are a key topic for consultants and advisors, with more than one-third saying they offer a proprietary managed account solution, the most commonly offered option. The survey found neutral to slightly positive support for the use of managed accounts in dynamic QDIAs in which participants initially default into a target date solution and then default into a managed account at a later age.
Respondents expect renewed interest in capital preservation investment options, including stable value and money market funds. Revisiting these options is primarily motivated by the evolving interest rate environment that has created an unusual situation in which money market fund yields are outpacing stable value crediting rates, said the report. There is some interest in how to most effectively use capital preservation products in other investment options, including target date solutions, managed accounts and retirement income products.
Around 85% of respondents believe the implementation of in-plan student debt programs may increase, while 70% believe the same for in-plan emergency savings solutions. Close to half of respondents are still evaluating AI use cases, as tools like chatbots, investment education, and real-time Q&A are gaining traction, the survey found.
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