58% of Plan Sponsors Seek to Retain Participant Assets Post-Retirement

June 30, 2023 — Boston

This issue of The Cerulli Edge—U.S. Monthly Product Trends analyzes product trends as of May 2023, including mutual funds and exchange-traded funds (ETFs), and assesses retirement income solutions offered by managers.

Highlights from this research:

  • Mutual funds closed May just above the $17 trillion mark, having suffered asset declines of 1.1% during the month. Mutual fund outflows became slightly more severe (-$56.0 billion) in May and dragged the YTD figure down to $143.6 billion.
  • ETFs continue to witness growth as assets have increased three months in a row and four out of five months in 2023. Assets sit at $6.9 trillion and stand poised to crack the $7.0 trillion mark as organic growth remains consistently positive and market performance generally has been strong thus far during 2023. Net flows amounted to $33.4 billion in May and were a significant contributor to overall growth. Net flows continue to be indicative of investor demand for the ETF vehicle.
  • Retirement income initiatives in 401(k) and other types of defined contribution (DC) plans have increased in recent years; 58% of their plan sponsor clients now actively seek to retain participant assets post-retirement, or prefer to do so. Managed payout funds—multi-asset-class investments that aim to produce regular, and predictable, income for their investors—currently are among the least offered solutions by asset managers (17%) but saw the greatest percentage increase in use compared to 2021 survey results (10%). Other approaches to the DC plan retirement income challenge include a liability-driven investment product introduced by LGIM America in 2022, as well as an expansion into tontines for the Canadian DC plan system.

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Note to editors

These findings and more are from The Cerulli Edge—U.S. Monthly Product Trends, June 2023 Issue.

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