Among active managers, J.P. Morgan Asset Management and Columbia Threadneedle Investments were the most-added managers, with seven plans each adding their active equity funds. The managers' added funds had $354 million and $88 million, respectively, in plan assets as of Dec. 31, according to new 11-K filings. Also among active managers, Dimensional Fund Advisors had the most funds removed during 2021 among the filings analyzed. Eleven plans removed equity investment options managed by Dimensional, which had a total of $794 million in plan assets as of Dec. 31, 2020, according to last year's 11-K filings.
The vast majority of Fidelity options added and Vanguard options removed were passive investments, just as they had been in previous years' analyses.
Bill Ryan, Chicago-based partner and head of defined contribution solutions at NEPC LLC, said in a phone interview there was a big push in 2021 at reducing the pricing for investment lineups' passive tier.
Specifically, he said plans would look at the interrelationship between their target-date fund series and their passive core investment option lineups and conduct manager searches with the intention of using one manager for both target-date funds and passive core options. That scale would enable plans to save on fees.
"They may stay with the incumbent, but you're still seeing the lowering of fees," he said.
Jessica Ludwig, managing partner, associate director of institutional consulting at Fiducient Advisors, Chicago, said that continuing strong investment returns caused significant asset gains in 2021 that enabled more plans to reach the investment minimums to qualify for certain collective investment trust share classes that offer lower fees.
"Many of our clients, and not just the jumbo-size plan market, were able to make even greater fee concessions across their target-date suites," Ms. Ludwig said. "They've been able to migrate even from an institutional mutual funds to the next tier of the CIT vehicle."
She added that this kind of activity has also trickled into 2022.
Mr. Ryan also said that plans are looking more closely at core investment options now that fewer assets are devoted to them.
Mr. Ryan said his firm is seeing about 44% of clients' assets in target-date funds and 56% in core lineups.
"Ten years ago, about 28% of client assets were in target-date funds, with 72% in the core lineup," Mr. Ryan said.
If a plan committee looks at an individual investment option that once held 5% of the assets in the plan and that has gone down to 2% or 1%, it has to ask: "What's the purpose of every investment option?"
"We've been spending a lot of time the last year revisiting what's the role of the different options and that might come down to downsizing," Mr. Ryan said.