Bank of America Merrill Lynch

Top 5

Consultants report top DC trends

PIMCO released its 12th annual Defined Contribution (DC) Consulting Support and Trends Survey to help plan sponsors understand the breadth of views and consulting services available within the DC marketplace. The 2018 survey captures data, trends and opinions from 77 consultant firms, the highest number in the 12-year history of the survey. Following are some highlights.

1 Evaluating and/or designing financial wellness programs is in the top five of growth services over the past year.
2 Top plan sponsor priorities next year include evaluating investment fees, simplifying core investment lineups, reviewing managed accounts, considering and/or reviewing health savings accounts and considering re-enrollment.
3 The top drivers of plan sponsor decisions for their DC plan are meeting participant retirement goals, managing risk, and attracting and retaining talent, in that order.
4 Assuming an employer match of 50 cents on the dollar (up to 6% of pay), 41% of consultants recommend auto-increase up to 10%; 22% recommend a cap at 15%; 21% recommend a cap at 12%.
5 68% of consultants strongly agree or agree that managed accounts produce better-performing portfolios than do-it-yourself investment approaches; 35% strongly agree or agree that managed accounts help increase plan participation and/or contribution levels; and 50% strongly agree or agree that personalization improves outcomes.