Today, over 50% of Americans working in private industry have access to employer-sponsored defined contribution (DC) retirement plans.¹ DC plans have accumulated $9.6 trillion in assets as of December 31, 2020—a 109% increase since 2007²—and now represent 28% of all U.S. retirement assets. The growing importance of DC plans to Americans’ retirement security has raised new concerns about whether plan menus, particularly their fixed income offerings, are positioned to meet evolving participant objectives.

Participants nearing retirement are faced with a growing challenge of generating income while managing investment risks. Plan sponsors are faced with providing a menu to help participants meet this challenge. In our view, many plan menus are in need of adding flexible fixed income options—namely multi-sector fixed income portfolios—that can better address this challenge.