Q: Erick, over the past year, we’ve seen a growing percentage of our plan assets invested in our target date fund offerings. How does this trend compare with the industry overall?
A: According to a recent survey by investment consultant NEPC, target date funds are increasing as a percentage of total plan assets. NEPC’s 2023 DC Plan Trends and Fee Survey revealed that 97% of plans currently offer target date funds (TDFs) and that, on average, 47% of plan assets are invested in TDFs. By comparison, 28% of plan assets were invested in TDFs in 2010. This increase is leading to a reduction in the number of core investment options, which are decreasing as a percentage of plan assets. The survey notes that 30% of plans currently have fewer than 10 core investment options. NEPC’s survey can be accessed at: https://tinyurl.com/2bdzhs9k (free registration required for download).
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Disclosures, Sources, and Footnotes
For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.
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©2024 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.
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