401(K) Plans Want More Personalized Retirement Offerings, According to PIMCO Consultant Survey

Majority of consultants surveyed said tailored solutions are a top priority for the industry

NEWPORT BEACH, Calif., May 23, 2022 (GLOBE NEWSWIRE) -- Personalized solutions are becoming more attractive for plan sponsors who are encouraging those saving for retirement to stick with their 401(k) provider after they leave the workforce, according to the 16th Annual Defined Contribution Consulting Study conducted by PIMCO, one of the world’s premier fixed income investment managers.

Approximately 80% of advisory firms known as aggregators and 65% of large institutional consultants recommend personalizing retirement offerings for their clients who provide individual retirement plans. Meanwhile, consultants report 76% of plan sponsors prefer to retain retiree assets, up from less than half in 2015. Allowing flexibility in income distribution, adding retirement education/tools and communicating the value of staying in plan, were among the most popular consultant recommendations for plans seeking to hold onto retiree assets.

PIMCO surveyed 36 consultants and advisory firms, who serve over 37,000 clients with $6.9 trillion in total assets in defined contribution plans, 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 $10 billion in DC assets under management.

“A generational shift in how Americans plan for retirement is creating demand for a more dynamic approach to saving and technological advances have made solutions tailored to plan participants specific circumstances much more accessible to the broader public,” said Rene Martel, Managing Director and PIMCO’s Head of Retirement.

Other survey findings:

  • While most prefer to retain retiree assets in the plan, consultants and aggregators diverge on recommended retirement income solutions. Institutional consultants prefer Target-date funds (TDF) with regular level payout; aggregators prefer managed accounts as a retirement income solution.
  • TDFs continue to dominate as the near-unanimous recommended default option, with all consultants and advisors surveyed ranking it as their number one choice. Two-thirds of institutional consultants and advisors said reviewing TDFs was a top priority, indicating they are keeping a close eye on fees and performance.
  • Institutional consultants and aggregators are also recommending TDFs that blend active and passive management styles more in most plan size segments.
  • Interest in non-traditional Defined Contribution (DC) investments increasing. Over 80% of consultants surveyed consider ESG when selecting investment options. In addition, one-third of consultants believe private investments benefit all clients' multi-asset portfolios; direct real estate, private equity and private credit receive highest consideration.
  • ESG continues to be a strong consideration when selecting investment options, emerging as a top three concern among plan sponsors.

A summary of the survey’s key findings can be found here: PIMCO.com/dc-survey

About the Survey
In its 16th 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 2022 study captures data, trends and opinions from 36 consulting and advisory firms who serve over 37,000 clients with aggregate DC assets in excess of $6.9 trillion. All responses were collected from January 4, 2022 through March 7, 2022.

About PIMCO 
PIMCO is one of the world’s premier fixed income investment managers. With our launch in 1971 in Newport Beach, California, PIMCO introduced investors to a total return approach to fixed income investing. In the 50+ years since, we have continued to bring innovation and expertise to our partnership with clients seeking the best investment solutions. Today we have offices across the globe and professionals united by a single purpose: creating opportunities for investors in every environment. PIMCO is owned by Allianz S.E., a leading global diversified financial services provider.

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. This material is distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

Except for the historical information and discussions contained herein, statements contained in this news release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the performance of financial markets, the investment performance of PIMCO's sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions and government regulations, including changes in tax laws. Readers should carefully consider such factors. Further, such forward-looking statements speak only on the date at which such statements are made. PIMCO undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Agnes Crane
PIMCO – Media Relations
Ph. 212-597-1054
Email: agnes.crane@pimco.com