Key Takeaways
- • NEPC's 20th annual DC Plan Trends Survey found DC plan assets grew 27-fold and participants increased eight-fold between 2004 and 2024, while investment management fees fell 67% over the period.
- • 59% of plans offered passive target-date funds as of year-end 2024, versus 22% offering blended options and only 19% offering active options.
- • Approximately one-third of plan sponsors made structural changes to U.S. large-cap equity options from 2020 to 2025, and 12% of plans removed the option entirely.
- • 14% of DC plans terminated managed account services since year-end 2023, with sponsors weighing value against cost.
- • 21% of DC plans surveyed by NEPC used white-label or custom funds, with NEPC projecting greater inclusion of alternative investments in those structures.
Summary
Between 2004 and 2024, defined contribution plan assets grew 27-fold and the number of participants increased eight-fold, according to NEPC LLC's 20th annual DC Plan Trends Survey, released this month. Over the same two-decade period, investment management fees declined 67%, and recordkeeping fees fell 26% between 2014 and 2024. Emma O'Brien, a partner at NEPC, said the trends "reflect structural change rather than cyclical market effects," attributing plan growth and fee compression to deliberate sponsor decisions.
NEPC identified four investment structure trends. The first is a shift from actively managed target-date funds toward blended or passive TDFs, which O'Brien attributed to lower passive implementation fees and a wider range of available glide paths. NEPC's survey found 95% of plans offered TDFs at year-end 2024: 59% offered passive products, 22% blended options, and 19% active options. T. Rowe Price's Jessica Sclafani, speaking at a January retirement market outlook briefing, described an "emerging blend trend," citing its 2025 Global Retirement Savers Study, in which 76% of sponsors said active management adds value and 78% pointed to passive management to protect against benchmark deviation.
The second trend involves U.S. large-cap equity. From 2020 to 2025, roughly one-third of plan sponsors made structural changes to these options, and 12% removed them. O'Brien said large cap is "a very efficient asset class," making it difficult for active managers to add value, and that sponsors are reassessing whether to offer active management or traditional style-box options such as value and growth.
Third, managed accounts face increased scrutiny. NEPC data show 14% of DC plans terminated managed account services since year-end 2023. As of December 2024, 48% of plans offered managed accounts, with 10% of participants using them and 9% of plan assets invested in them. PLANSPONSOR's 2025 Defined Contribution Survey found 43.6% of responding sponsors offered professionally managed accounts. PGIM DC Solutions reported that 70% of sponsors would consider an opt-in managed account if fees were 10 basis points or lower. O'Brien said the termination decision "really comes down to assessing the value provided relative to cost," and that providers and recordkeepers have become more willing to negotiate. Morningstar research published in January found that adopting a managed account raised participants' median lifetime wealth ratios at age 65 by 7.7%.
Fourth, alternative investments are appearing in white-label custom funds. NEPC found 21% of surveyed DC plans used such funds, and it projects greater inclusion of alternatives within them. Mikaylee O'Connor, a partner and DC team leader at NEPC, said sponsors "tend to incorporate them selectively through custom solutions" and remain focused on fiduciary alignment.
NEPC's survey covered 14 recordkeepers representing 276 DC plans with $448 billion in aggregate assets and 3.2 million participants as of December 31, 2024. The PLANSPONSOR DC Survey, fielded in mid-2025, incorporated 4,387 plan sponsor responses.
NEPC identified four investment structure trends. The first is a shift from actively managed target-date funds toward blended or passive TDFs, which O'Brien attributed to lower passive implementation fees and a wider range of available glide paths. NEPC's survey found 95% of plans offered TDFs at year-end 2024: 59% offered passive products, 22% blended options, and 19% active options. T. Rowe Price's Jessica Sclafani, speaking at a January retirement market outlook briefing, described an "emerging blend trend," citing its 2025 Global Retirement Savers Study, in which 76% of sponsors said active management adds value and 78% pointed to passive management to protect against benchmark deviation.
The second trend involves U.S. large-cap equity. From 2020 to 2025, roughly one-third of plan sponsors made structural changes to these options, and 12% removed them. O'Brien said large cap is "a very efficient asset class," making it difficult for active managers to add value, and that sponsors are reassessing whether to offer active management or traditional style-box options such as value and growth.
Third, managed accounts face increased scrutiny. NEPC data show 14% of DC plans terminated managed account services since year-end 2023. As of December 2024, 48% of plans offered managed accounts, with 10% of participants using them and 9% of plan assets invested in them. PLANSPONSOR's 2025 Defined Contribution Survey found 43.6% of responding sponsors offered professionally managed accounts. PGIM DC Solutions reported that 70% of sponsors would consider an opt-in managed account if fees were 10 basis points or lower. O'Brien said the termination decision "really comes down to assessing the value provided relative to cost," and that providers and recordkeepers have become more willing to negotiate. Morningstar research published in January found that adopting a managed account raised participants' median lifetime wealth ratios at age 65 by 7.7%.
Fourth, alternative investments are appearing in white-label custom funds. NEPC found 21% of surveyed DC plans used such funds, and it projects greater inclusion of alternatives within them. Mikaylee O'Connor, a partner and DC team leader at NEPC, said sponsors "tend to incorporate them selectively through custom solutions" and remain focused on fiduciary alignment.
NEPC's survey covered 14 recordkeepers representing 276 DC plans with $448 billion in aggregate assets and 3.2 million participants as of December 31, 2024. The PLANSPONSOR DC Survey, fielded in mid-2025, incorporated 4,387 plan sponsor responses.
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