Keep pulling the thread on Eric Mogelof.
Over 60% of all new flows into defined contribution (DC) plans are being directed into target date funds.
Of the $4.5 trillion in defined contribution investment solutions, $3.5 trillion is held in off-the-shelf target date funds.
The off-the-shelf target date fund market is dominated by six managers—Vanguard, Fidelity, BlackRock, State Street, T-Rowe Price, and Capital Group—which control over 85% of the assets.
The Department of Labor (DOL) recently issued a statement about potentially incorporating private markets into a "safe harbor" provision for Qualified Default Investment Options (QDIAs), which would offer legal protection to plan sponsors.
Eric Mogelof predicts that within a decade, defined contribution (DC) plans will have allocations to private markets between 10% and 15%.
The total retirement market in the United States holds more than $40 trillion in assets.
The defined contribution (DC) market in the United States is valued at approximately $12.5 trillion, representing about 30% of the overall retirement market.
In private equity, the performance gap between a top-quartile manager and a fourth-quartile manager can be as large as 2,000 basis points.
Over the last 20 years, corporate defined benefit (DB) plans have shifted assets into fixed income, which now accounts for 50-60% of portfolios, driven by accounting changes that incentivized liability hedging.
Approximately 40% of all defined contribution (DC) assets are held in investment solutions such as target date funds or managed accounts.
Large companies such as Boeing, Ford, Intel, and IBM have created their own custom target date funds for their defined contribution plans.
401(k) plan sponsors have historically favored the lowest-cost investment options in part to shield themselves from potential litigation from plan participants.