DC Plan Sponsors to Modernize Investment Menus, According to PIMCO Consulting Study

Over half of institutional consultants anticipate that a majority of their plan sponsor clients will add active non-core fixed income options, while 45% expect increased adoption of multi-asset inflation hedging strategies to investment menus, according to the 20th Annual Defined Contribution (DC) Consulting Study conducted by PIMCO, a global leader in active fixed income with expertise across public and private markets.

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“Fixed income markets have changed significantly over the last decade, but most DC plan menus still reflect a narrower, legacy opportunity set. What we’re seeing in this study is a clear shift: consultants and plan sponsors recognize that participants need access to a broader range of fixed income solutions in order to better navigate today’s market environment and improve long-term retirement outcomes,” said Rene Martel, Managing Director and PIMCO’s Head of Retirement.

In addition to active non-core fixed income and multi-asset inflation, consultants also highlighted strong interest in adding private credit in asset allocation solutions. About half of consultants and 91% of aggregators ranked private credit among the most likely private assets to be added in the near term, according to the survey where responses were collected from January 5 through February 16, 2026.

The 2026 study captures data, trends and opinions from 36 consulting and advisory firms who serve over 53,000 clients with aggregate DC assets in excess of $10.2 trillion as of the date survey responses were collected.

Other survey findings:

• The study finds that nearly 80% of consultants and advisors expect plan sponsors to move toward blended target-date funds (TDFs), which combine active and passive management, as the new default strategy. Sponsors are also willing to pay a premium fee more for active bond strategies, reflecting confidence in active management where it may add value.
• In parallel, demand for more tailored solutions continues to grow. Nearly half (46%) of aggregator firms anticipate increased adoption of fully customized TDFs, while 85% expect rising interest in participant-personalized TDFs as next-generation defaults.
• All aggregator firms surveyed expect at least some plan sponsors to introduce private market exposure within target-date funds or managed accounts over the next 12 months, up from 37% in last year’s study. A majority of institutional consultants (57%) report similar expectations. As adoption expands, consultants and advisors emphasize balancing return potential with asset quality, cost, and maintaining adequate liquidity to meet DC daily needs.
• Retirement income is emerging as a core component of DC plan design. More than half (52%) of plans working with consultants already offer in-plan retirement income solutions, and 93% of aggregators plan to add such options within the next year. Target-date funds incorporating built-in annuities are increasingly viewed as a key innovation area, signaling a shift from accumulation-focused design to income-oriented outcomes.
• DC intermediaries are competing on participant services, with aggregators investing heavily in education and guidance. About 93% of aggregators now offer one-on-one financial planning versus 30% of consultants. Most consultants continue to rely on third parties, underscoring a widening divide in how firms position themselves as retirement partners.

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