During Day Three of the PLANSPONSOR National Conference, in Washington, D.C., BrightScope data revealed top trends influencing the defined contribution (DC) industry.

Allegra Heyligers, managing director of Strategic Insight, highlighted the pivotal role defined contribution plans play in the retirement marketplace, with a $7 trillion increase in DC assets since 2001, 24 million plan participants and 660,000 existing plans. Additionally, Heyligers mentioned the growing average rate of participation and rising cash contributions. In 2015, total cash contributions amounted to $425 billion—a surge from the $291 billion in 2009.

She attributed the growing changes to the Pension Protection Act of 2006 (PPA), which created safe harbors for automatic enrollment and qualified default investment alternatives (QDIAs), typically target-date funds (TDFs). As a result, 27% of total plans auto-enroll new hires; TDF assets have risen 27% annually from 2009 to 2014; and 76% of all plans now offer TDFs.

The panel discussed recent developments to monitor investments, including the impact of lower-cost institutional share classes. Referring to BrightScope data, Heyligers said plan sponsors should expect to see more of these introduced, as R-share formation has initiated an enhanced alignment between investors’ and distributors’ needs.

Full Content: Plan Adviser

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