US. Average Number of Retirement Plan Investment Options Growing
The average number of investment options in a retirement plan lineup has been increasing slowly over the last few years, according to data from PSCA’s Annual Survey.
For years, the conversation was around reducing the number of options available so as to not overwhelm employees with too many choices which can lead to them not making a choice at all. The average number slowly decreased and then hovered at about 19 options for many years — about five years ago it started ticking up and hit 23 last year.
The Plan Sponsor Council of America recently asked its members how many options they offer, and what they think an optional number should be and why. Nearly one-third of respondents said they offer between 15 and 19 funds, while almost 30% offer 10-14, 20% offer 20-23, and 16% offer more than 25.
The comments we received from respondents generally share the idea that offering somewhere between 10-20 investment options, depending on the participant base, is a good option. Many said they aim for 1 or 2 per major asset category. Full comments follow.
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