Larger DC plans are likely to offer fewer diversification options than smaller plans and due to this fact allocate a bigger proportion of assets to more traditional asset classes. This is a somewhat surprising result, considering that larger plans are likely to be more acquainted with the potential advantages of other investments, particularly those who also sponsor defined profit plans. In theory, larger plans also needs to have higher access to specialized investment options, including private assets, than smaller plans. It will likely be price watching how this apparent discrepancy develops.
Taken together, these trends suggest that asset allocation inside the DC core menus is formed not only by conscious portfolio construction, but additionally by defaults, availability, and plan design decisions. Understanding how these forces interact will grow to be increasingly essential for investment professionals as DC plans proceed to play a bigger role in retirement planning.
[1] Cerulli (2025)
