401(K) Plan Sponsors See Income Solutions for Retirement as Top Priority, according to PIMCO Consultant Survey
Newport Beach, California (June 6, 2024) – Nearly 90% of large institutional consultants say the top priority for their clients is to find solutions for income generation during retirement, a 21% increase over the previous year, according to the 18th Annual Defined Contribution (DC) Consulting Study conducted by PIMCO, a global leader in active fixed income with expertise across public and private markets.
This comes as roughly two-thirds of those surveyed said their clients preferred or actively sought to retain assets of workers once they retire. Moreover, there was unanimous support among consultants for plan sponsors to offer investments and services for retirees with more than 50% of plan sponsors already implementing such plans.
PIMCO surveyed 28 consultants and advisory firms, who serve over 15,000 clients, as part of the firm’s effort to capture the breadth of views in the industry as well as services available amid rapidly changing demographics of plan participants. Published results were based on responses from firms with more than $5 billion in DC assets under management.
“The focus on retirement income continues to be a theme that is top of mind for consultants and their clients,” said Rene Martel, Managing Director and PIMCO’s Head of Retirement. “As more and more workers enter retirement, we expect to see a secular shift toward income generating investments and services for those who spent decades saving for retirement through defined contribution plans like the 401(k).”
Other survey findings:
- Plan sponsors are making progress in adding retirement income solutions with a focus on plan design, education and expanding investment options for retirees on plan menus.
- Consultants expect Qualified Default Investment Alternatives (QDIAs) to incorporate more personalization in the future, especially if delivered at a lower price point and in a manner that reduces the need for direct participant engagement (for example, potentially using record keeper data).
- Aggregators and Institutional Consultants often take diverging paths to addressing retiree needs; personalized vs. incremental approach to evolving plan menus; Institutional Consultants and Aggregators both typically offer retirement income product evaluation and implementation services; differ on their approach to plan participants.
A summary of the survey’s key findings can be found here: PIMCO.com/dc-survey
About the Survey
In its 18th year, the PIMCO US Defined Contribution Consulting Study seeks to help consultants, advisors and plan sponsors understand the breadth of views and consulting services available within the defined contribution (DC) marketplace. Our 2024 study captures data, trends and opinions from 28 consulting and advisory firms who serve over 15,000 clients with aggregate DC assets in excess of $7.9 trillion as of the date survey responses were collected. All responses were collected from January 8, 2024 through February 26, 2024.
