While Defined Contribution plan sponsors want their participants to be successful in retirement, we look at asset allocation and how participants rebalance allocated assets to gauge how successful they may be. 

Participants lack confidence to make investment decisions. And many sponsors do not want to use automatic enrollment paired with Target Date Funds as the QDIA. But according to SEI's DC expert, Mike Swann, it's nearly impossible to get participants to rebalance. In fact, the National Association of Retirement Plan Participants' recent study found less than half of participants look at their retirement plan website or call the center. Mike says,

"In order to ensure that participants' assets are properly diversified and continue to be, automatic enrollment paired with TDFs really is the best option." Mike Swann, SEI

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"TDFs automatically rebalance over years and some even take participants through retirement. If an employer has a rich plan, custom TDFs are a great way to get there, as well, and have become more cost effective."

Experts agree that rebalancing is key. Read the full PlanSponsor article. 

The Importance of Rebalancing DC Plan Portfolios

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Information provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned subsidiary of SEI Investments Company.