PIMCO Defined Contribution Consulting Study 2020

Seeking to help consultants, advisors and plan sponsors understand current views and trends within the DC marketplace.

Further Understanding Defined Contribution

In its 14th year, the PIMCO 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. This year’s study includes a diverse set of respondents throughout the DC industry’s consultants and advisors.

  • 73 Consulting and Advisory Firms

  • 26,000 Clients Served

  • DC Assets in Excess of $5.1 Trillion


The Report

Our 2020 Study reflects the responses of 73 consulting and advisory firms, who serve over 26,000 clients with aggregate DC assets in excess of $5.1 trillion.

Larger plan consultants and advisors were identified as having both $5 billion or more in DC assets under advisement and a median plan size over $50 million. Smaller plan consultants and advisors were identified as having up to $5B in DC assets under advisement or a median plan size of $50MM or less.

All responses were collected from February 11, 2020 through March 27, 2020 amidst the market volatility attributed to the COVID-19 pandemic. The SECURE Act was signed on December 20, 2019 and the CARES Act was passed into law on March 27, 2020.

The Evolving QDIA Space

From product features to retirement plan design, our Consulting Study addresses the evolving trends in the QDIA space.


Blend Is the Trend

Active/passive blend target date funds are a preferred solution for all plan sizes under $1B

$500M to less than $1B
48%
$200M to less than $500M
56%
$50M to less than $200M
52%
Less than $50M
49%

Question to Consultants: What type of target-date offering do you recommend for plans of the following sizes? (Large: n=27;Small: n=46)

Searches Are Triggered by More Than Performance

“Concern with Current Glidepath Allocation”, “Fees”, and “Poor Performance” cited as most likely reasons to initiate a search.

Factors Most Likely to Trigger a Target Date Fund Search

Large Plan Market Consultant

Small Plan Market Consultant

Concern with current glide path allocations
59%
72%
Fees
74%
52%
Poor performance
63%
52%
Desire for active/passive blend strategy
19%
39%

Question to Consultants: Please identify the top 3 factors that you expect to cause your clients to initiate a TDF search in the next 1-2 years. (Large: n=27; Small: n=46)

One Size Does Not Fit All

Plans’ individual circumstances determine the preferred glide path structure

Most Important Factors When Selecting a Glide Path

Large Plan Market Consultant

93% circle chart 

Nearly all large plan consultants agree that the preferred structure varies for each plan, depending upon demographics, sponsor's preference to retaining retirees, etc.

Small Plan Market Consultant

80% circle chart 

4 out of 5 small plan consultants agree that the preferred structure varies for each plan, depending upon demographics, sponsor's preference to retaining retirees, etc.

Question to Consultants: Which of the following is the most important factor when choosing a glide path? (Large: n=27; Small: n=46)

Key Findings

Download PIMCO’s DC Consulting Study key findings report for the latest trends and supporting data.

Disclosures

All investments contain risk and may lose value. Investors should consult their investment professional prior to making an investment decision.

The survey results contain the opinions of the respondents at the time of the survey and may not reflect current opinions or investment strategies. These results may or may not match the views of PIMCO and are not intended to be reflective of PIMCO's opinions on the market or any particular investment style or strategy. PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. Pacific Investment Management Company LLC, 650 Newport Center Drive, Newport Beach, CA 92660 | 800.387.4626 ©2020, PIMCO

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