Question: 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?
Answer: 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 here (free registration required for download).
