Bigger DC plans have a tendency to supply fewer diversifiers than smaller plans and, in consequence, allocate a higher share of property to extra conventional asset lessons. It is a considerably shocking discovering, on condition that bigger plans are usually extra acquainted with the potential advantages of other investments, notably those who additionally sponsor outlined profit plans. In principle, bigger plans must also have higher entry to specialised funding choices, together with non-public property, than smaller plans. How this obvious disconnect evolves can be price watching.
Taken collectively, these developments counsel that asset allocation inside DC core menus is formed not solely by deliberate portfolio building, but in addition by defaults, availability, and plan design decisions. For funding professionals, understanding how these forces work together is more and more essential as DC plans proceed to play a bigger function in retirement financial savings.
[1] Cerulli (2025)
