PGIM Surveys Plan Sponsors, Assesses DC Landscape and Perspectives on Optimizing Retirement Outcomes
PGIM DC Solutions, the retirement solutions provider of PGIM, announces the results of its Defined Contribution (DC) Landscape Survey, illuminating varying perspectives and trends across retirement plan decision-maker communities.
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Michael Miller, Managing Director and Head of PGIM DC Solutions (Photo: Business Wire)
PGIM's research, conducted in partnership with Greenwald Associates, is based on a survey of 302 retirement plan decision-makers.
"Employers and plan sponsors have shown a clear interest in providing better retirement outcomes for employees," said Michael Miller, managing director and head of PGIM DC Solutions. "As the industry evolves, enhanced income solutions, plan design, advice, education and communication will all play pivotal roles in improving the retirement experience for American workers."
The survey results have been organized into a four-part series, with analysis and commentary led by David Blanchett, head of retirement research at PGIM DC Solutions.
Key focus areas and findings include:
- Personalized solutions can improve retirement outcomes. Survey results indicate significant interest in personalized solutions, with 88% of plan sponsors surveyed believing personalized advice and guidance will improve retirement outcomes. Interest in managed accounts, especially when used as the default investment, increases significantly at lower price points. For example, 63% of plans are interested at 10 or less basis points, which is significantly less than price points today which tend to equal or exceed 25 basis points.
- Quality investments make a meaningful impact. Overall satisfaction with plan investments is relatively high in areas such as asset class diversification (93%), performance (91%) and cost (85%). DC plan decision-makers were also relatively satisfied with target-date funds (TDFs) and have relatively high conviction in certain exposures, including active fixed income, high-yield bonds and alternative assets such as real estate and commodities. However, concerns exist with respect to the glide path, volatility and lawsuit vulnerability.
- Tools and education will be key to retirement success. Survey results reveal 81% of respondents agree a key component to achieving retirement success entails retirees having access to tools and education to help navigate investing, spending and Social Security decisions. However, only 48% of plans offer tools to help retirees determine prudent spending levels and only 20% of plans offer Social Security claiming tools.
- There is room to improve retirement outcomes for plan participants. While it is clear plan sponsors believe DC plans offer competitive advantages and help retain top talent, 64% of respondents believe plans need to be more innovative. Plan communications are the most widely noted area for potential plan enhancements, with 85% of respondents having noted customized communications can lead to better retirement outcomes. Artificial intelligence (AI) could be leveraged to simplify personalized communications, though relatively few plans note using AI today.
"DC plans continue to improve to help participants get not just to, but through retirement," noted Blanchett. "While the industry progress is promising, our survey results suggest more can be done to optimize retirement for DC participants, though cost limitations persist."
More detailed findings from the survey and accompanying four-part series and analysis can be found here.
ABOUT THE SURVEY
The research was conducted in partnership with Greenwald Associates. Online surveys were completed by 302 retirement plan decision-makers in September and October of 2024. Respondents included decision-makers for DC plans with at least $10 million in plan assets. Larger plans were oversampled, with 152 respondents being decision-makers in plans with at least $100 million in assets. Findings were weighted by plan asset size, using data from a BrightScope/ICI 2021 report.
ABOUT PGIM DC SOLUTIONS
As the retirement solutions provider of PGIM, PGIM DC Solutions seeks to deliver innovative defined contribution solutions founded on market-leading research and capabilities. Our highly experienced team partners with clients on customized solutions to solve for retirement income. As of Sept. 30, 2024, PGIM had $177 billion in DC assets under management and PGIM DC Solutions' AUM was $1.3 billion.1
ABOUT PGIM
PGIM is the global asset management business of Prudential Financial, Inc. ((PRU). In 42 offices across 19 countries, our more than 1,400 investment professionals serve both retail and institutional clients around the world.
As a leading global asset manager with $1.4 trillion in assets under management,2 PGIM is built on a foundation of strength, stability, and disciplined risk management. Our multi-affiliate model allows us to deliver specialized expertise across key asset classes with a focused investment approach. This gives our clients a diversified suite of investment strategies and solutions with global depth and scale across public and private asset classes, including fixed income, equities, real estate, private credit, and other alternatives. For more information, visit pgim.com.
1 Reported data reflect the assets under management by PGIM and its investment adviser affiliates for defined contribution investment purposes only.
2 As of Sept. 30, 2024.
PGIM DC Solutions LLC ("PGIM DC Solutions) is an SEC-registered investment adviser, a Delaware limited liability company, and an affiliate of PGIM, Inc. ("PGIM"), the principal asset management business of Prudential Financial, Inc. ("PFI") of the United States of America. PFI of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom, or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. Registration with the SEC does not imply a certain level of skill or training.
Receipt of these materials by anyone other than the intended recipient does not establish a relationship between such person and PGIM DC Solutions LLC ("PGIM DC Solutions") or any of its affiliates. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any security. The information presented is not intended as investment advice and is not a recommendation about managing or investing retirement savings. These materials do not take into account individual investment objectives or financial situations.
These materials represent the views, opinions and recommendations of the author(s) regarding the economic conditions, asset classes, securities, issuers, or financial instruments referenced herein. Any reproduction of this document, in whole or in part, or the disclosure of any of its contents, without PGIM's prior written consent, is prohibited. This document contains the current opinions of the manager, and such opinions are subject to change. Certain information in this document has been obtained from sources that PGIM believes to be reliable as of the date presented; however, PGIM cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed. PGIM has no obligation to update any or all such information; nor do we make any express or implied warranties or representations as to its completeness or accuracy. Any information presented regarding the affiliates of PGIM is presented purely to facilitate an organizational overview and is not a solicitation on behalf of any affiliate. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any security or other financial instrument or any investment management services. These materials do not constitute investment advice and should not be used as the basis for any investment decision. Past performance is not a guarantee or a reliable indicator of future results.
These materials are for informational or educational purposes. In providing these materials, PGIM is not acting as your fiduciary and is not giving advice in a fiduciary capacity. The information contained herein is provided on the basis of and subject to the explanations, caveats and warnings set out in this notice and elsewhere herein. Any discussion of risk management is intended to describe PGIM's efforts to monitor and manage risk but does not imply low risk. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. These materials do not purport to provide any legal, tax or accounting advice. These materials are not intended for distribution to or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. Certain information contained in this document constitute "forward-looking statements," which can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "anticipate," "target," "project," "estimate," "intend," "continue" or "believe" or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of the investments may differ materially from those reflected or contemplated in such forward-looking statements. Any projections or forecasts presented herein are as of the date of this presentation and are subject to change without notice. Actual data will vary and may not be reflected here. Projections and forecasts are subject to high levels of uncertainty. Accordingly, any projections or forecasts should be viewed as merely representative of a broad range of possible outcomes. Projections or forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. PGIM has no obligation to provide updates or changes to any projections or forecasts.
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