T. ROWE PRICE STUDY REVEALS DC CONSULTANTS' EVOLVING VIEWS ON PRIVATE ASSETS, RETIREMENT INCOME, AND MANAGED ACCOUNTS

Core Insights - The 2025 Defined Contribution (DC) Consultant Study by T. Rowe Price highlights key retirement trends and investment themes from 36 leading consultants and advisory firms, focusing on alternative assets, target date solutions, managed accounts, and capital preservation options in a changing interest rate environment [1][6]. Group 1: Alternative Assets in DC Plans - Consultants expect target date solutions to be the primary vehicle for implementing alternative assets in DC plans, with a notable year-over-year increase in expectations for private credit and private equity [2]. - 72% of respondents identified fees as a significant barrier to implementing alternative investments, followed by liquidity concerns (44%) and operational complexity (39%) [2]. Group 2: Retirement Income Solutions - There is a growing interest in retirement income services, with a systematic withdrawal being the preferred feature for delivering income to retired DC plan participants, rated 3.2 on a scale of 1-4 [3]. - Target date solutions that incorporate retirement income features, such as partial annuitization, received the highest ratings from respondents [3]. Group 3: Managed Accounts - Over one-third (37%) of respondents offer proprietary managed account solutions, primarily as opt-in options on investment menus [4]. - There is a neutral to slightly positive sentiment towards using managed accounts in dynamic Qualified Default Investment Alternatives (QDIAs) [4]. Group 4: Capital Preservation Investment Options - Respondents anticipate renewed interest in capital preservation options, particularly due to the current interest rate environment where money market fund yields are surpassing stable value crediting rates [5]. - There is interest in integrating capital preservation products like stable value into other investment options, including target date solutions and managed accounts [5]. Group 5: Industry Trends and Perspectives - The study indicates a shift in consultants' and advisors' views on private assets in DC plans and the exploration of target date solutions that support both savings and spending phases [6]. - 73% of respondents noted a greater focus on fixed income diversification opportunities, with a preference for active management in credit-oriented fixed income sectors [6]. - There is strong support for blended target date solutions that combine active and passive investment strategies [6]. Group 6: Emerging Trends - Approximately 85% of respondents believe in-plan student debt programs will increase, while 70% expect growth in in-plan emergency savings solutions [12]. - Nearly half (44%) of respondents are evaluating AI use cases, with tools like chatbots and real-time Q&A gaining traction [12].