Defined contribution plan sponsors have become more interested in encouraging participants to keep assets in their plans after retirement, a survey of DC consultants by the Pacific Investment Management Co. LLC revealed.
The reasons include the traditional desire to have more assets in a plan so sponsors have better bargaining power to secure lower prices with vendors as well as a growing effort to offer retirement income products and services, said Rene Martel, head of retirement and a managing director in Newport Beach, Calif.
"If you want to retain assets, offer them something," Mr. Martel said, noting that many respondents' clients already provide or plan to provide an assortment of inducements such as retirement income education tools, flexible distribution policies and personalized advice.
The findings, released April 19, are part of the 15th annual PIMCO survey covering institutional DC consultants representing clients with a total of $5.5 trillion in retirement assets. The survey was conducted in January and February. It contains responses from 29 consulting firms with DC assets under advisement of $10 billion or more. Twenty-four percent of the consultants estimated that their clients had median DC assets of more than $500 million, and 73% estimated the clients had median DC assets of more than $100 million.
PIMCO also polled smaller-plan consultants and advisers, which PIMCO calls aggregators, whose clients had total assets of $1.2 trillion. This survey contained responses from 11 firms with DC assets under advisement of $10 billion or more. Ninety percent of their clients estimated that their plans had median DC assets of $100 million or less.