Majority of 401(k) Consultants Support Additional Services in Plans for Retirees

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NEWPORT BEACH, Calif., April 16, 2018 (GLOBE NEWSWIRE) -- The majority of 401(k) consultants support additional services in defined contribution retirement plans as participants rely more heavily on such funds when they retire, according to according to the 12th annual published by PIMCO, one of the world’s premier fixed income investment managers.

The survey, which aims to help plan sponsors understand the breadth of views and consulting services available within the defined contribution retirement market, included the participation of 77 consulting firms which represent 17,000 plan sponsors with over $4.4 trillion in plan assets.

Nearly two-thirds (64%) of those surveyed said they believe plans should offer a “separate retirement income tier,” which may include retiree-focused services and products. While more research is needed to determine the “right” retirement income investment, the majority said no additional fiduciary risk, liquidity, and inflation protection were the most important attributes in a strategy. Consultants also said participants were in favor of monthly distributions and desired a minimum yield of 4 or 5%.

Half of the consultants surveyed recommended an income focused multi-sector strategy given that income during retirement, rather than just the size of the portfolio, becomes relatively more important for participants.

For plan sponsors who would like to retain participants in their plans after they retire, the consultants recommend adding a retirement education tool (80%), allowing distribution flexibility (77%) and adding retiree-focused investment options (76%).  Similar to last year, consultants place investment solutions (rather than insurance products) at the top of their retirement income suggested list.  Their top 3 suggestions are at-retirement target-date vintage(s), cash management and income/multi-sector fixed income strategies.

“Defined contribution plans offer retirees many advantages, including access to institutionally priced investment structures and products such as stable value and multi-manager strategies,” says Stacy Schaus, Executive Vice President and DC Practice Leader. “Today, approximately two-thirds of defined contribution assets are held by participants over 50 years old. As participants enter retirement, 401(k) plans will need to tailor their offerings further in order to support the distinct needs of those no longer working.” 

Other findings from the survey:

PIMCO’s DC Practice has prepared the 12 annualto help plan sponsors understand the breadth of views and consulting services available within the defined contribution retirement market. Our 2018 survey captures data, trends and opinions from which serve over with aggregate DC assets in excess of .

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.

Contact:Agnes CranePIMCO – Media Relations Ph. 212-597-1054Email:  

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Globe Newswire: 14:30 GMT Monday 16th April 2018

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