Joint research conducted by AllianceBernstein (AB) and BrightScope in 2017 showed that fewer plan sponsors were using their recordkeepers’ proprietary TDFs—and that more plan sponsors were choosing nonproprietary TDFs from other managers. The two firms revisited the data for 2015 (the most recent year for which data are available)—data spanning more than 7,800 401(k) plans and representing $2.4 trillion in assets and 27.9 million participants—to see if the trends continued.
What Does the Future Hold for TDFs?
The target-date marketplace continues to change, with growing emphasis on the fiduciary role of plan sponsors, consultants and advisors.
With more choices than ever before, many plan sponsors are decoupling their choice of recordkeeper from their target-date-solution choice. Plan sponsors are seeking the best possible outcomes for plan participants—by keeping them on a path toward being more financially prepared for retirement. Better quality portfolio management, lower fees and solid investment performance all help—and plan sponsors are now looking at a broader set of options before making a decision.