Global DC savings still decades from resolving retirement cash crunch fears

Core Insights - Many defined contribution (DC) plans are skeptical about members achieving sufficient retirement income, with a belief that reversing this trend will take decades [1][2] - The Global DC Peer Study 2025 highlights that 60% of expert participants view retirement income as the primary challenge for DC funds in the next decade [2] Investment Trends - Alternative investments now have an average allocation equal to bonds, both at 20%, with equities comprising the remaining 60%, indicating a significant shift in investment strategy [5] - There is a growing consensus that current lifecycle designs may be underperforming, particularly by being too conservative in the early investment stages [6][9] Member Engagement and Behavior - Many retirees are engaging late and tactically rather than strategically, which is a concern for DC plans focusing on retirement adequacy [3] - There is an increasing engagement from members, plans, and governments regarding the sufficiency of current DC contributions for a decent retirement [10][11] Future Directions - Some plans are experimenting with collective defined contribution (CDC) or hybrid options to balance flexibility and sustainable income, although these are still exceptions [4] - The emphasis on decumulation and whole-of-life solutions is growing, with a recognition that greater contributions and long-term investment returns are essential for addressing retirement adequacy [8]