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Survey: Stability Is In

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Consultants who serve defined contribution retirement plans now have more interest in bonds and stable-value products.

PIMCO, Newport Beach, Calif., a unit of Allianz S.E., Munich, Germany, is reporting that finding in a summary of results from a recent survey of 32 U.S. defined contribution plan consulting firms.

The firms serve about 1,400 clients with $1.6 trillion in defined contribution plan assets.

PIMCO, known for its focus on selling bonds, says 61% of the consultants are expecting plan sponsors to show more interest in adding Treasury- or government-only money market funds.

About 61% of consultants said they are helping evaluate defined contribution plans’ existing stable-value offerings, by assessing the underlying manager performance and monitoring the market-to-book ratio.

Meanwhile, 35% of the consultants said they will revise “target-date” strategies, which shift assets toward more conservative allocations as participants near retirement age, to be more conservative.

But about 94% of the consultants said they believe target-date strategies will continue to be the most prevalent form of qualified default investment alternative vehicle in defined contribution plans.

About 78% expect defined contribution plan sponsors to consider adding “guaranteed income” products over the next 2 years.