Menu Our services in the selected location:
  • No services available for your region.
Select Location:
Remember my selection
Your browser is out of date. It has known security flaws and may not display all features of this and other websites

Defined Contribution Quarterly Q3 2021

(R)evolution of the QDIA Landscape

There has been tremendous focus on and increased utilization of default investing since the Pension Protection Act of 2006 (PPA). While several types of investments are eligible under the qualified default investment alternative (QDIA) rules, Target Date Funds (TDFs) have captured the bulk of the assets. Will TDFs continue their dominance as QDIA options in DC plans?

We believe the market share among the QDIA types may now be poised for greater change as outlined in the full report.

Percent of TDF Use as QDIAs

Target Date Funds make up 79% of the QDIA plan options.

Source: PSCA's 63rd Annual Survey, published 2021.

Growth of TDF Assets

The target date market has grown rapidly over the last decade to an estimated $2.8 trillion.

Source: Morningstar, 2021 Target-Date Strategy Landscape. Data as of 12/31/2020.

What is a Hybrid QDIA?

Industry trends emerging around the desire for (1) retirement income and (2) increased personalization/ customization may lead to a revolution of QDIAs altogether. A hybrid QDIA is an approach in which a participant’s default investment starts as one type of investment (such as a target date fund) and, upon reaching a certain threshold (e.g., account balance, age), automatically transitions to a different type of investment (such as a more retirement-focused solution like a managed account). 

Source: Goldman Sachs Asset Management.

Related Insights

  • GSAM Connect 25 June 2021

    The Insatiable Demand for Fixed Income

    Much has been made recently of the rise in funded levels of US corporate defined benefit pension plans, due in no small part to rising interest rates. One consequence of this is an expectation that more sponsors will shift their asset allocations to high quality fixed income from equities or other return seeking assets in an effort to better match plan assets with plan liabilities.

    Read More
  • GSAM Connect 28 May 2021

    Investing With Impact: Benefitting Society, Boosting Performance Potential

    Environmental, social and governance (ESG) factors were once considered “nice to have” for investors who wanted to align their portfolios with their values. Today, we think incorporating them is essential for generating outperformance.

    Read More
  • GSAM Connect 14 May 2021

    Women in the Workplace: Why It Matters

    Female workforce participation rates in the developed world have increased in recent decades, particularly in Europe. That’s good news, in our view, for society, and corporate profitability. But when it comes to women in senior management roles and closing the pay gap, there’s plenty of work to do, particularly in the financial services industry

    Read More

Disclosures

The views expressed herein are as of 7/22/2021 and subject to change in the future. Individual portfolio management teams for GSAM may have views and opinions and/or make investment decisions that, in certain instances, may not always be consistent with the views and opinions expressed herein.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security, they should not be construed as investment advice.

THESE MATERIALS ARE PROVIDED SOLELY ON THE BASIS THAT THEY WILL NOT CONSTITUTE INVESTMENT ADVICE AND WILL NOT FORM A PRIMARY BASIS FOR ANY PERSON’S OR PLAN’S INVESTMENT DECISIONS, AND GOLDMAN SACHS IS NOT A FIDUCIARY WITH RESPECT TO ANY PERSON OR PLAN BY REASON OF PROVIDING THE MATERIAL OR CONTENT HEREIN. PLAN FIDUCIARIES SHOULD CONSIDER THEIR OWN CIRCUMSTANCES IN ASSESSING ANY POTENTIAL INVESTMENT COURSE OF ACTION.

Past performance does not guarantee future results, which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur.

THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO DO SO. This material is provided at your request for informational purposes only. It is not an offer or solicitation to buy or sell any securities.

Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant.

Goldman Sachs does not provide legal, tax or accounting advice, unless explicitly agreed between you and Goldman Sachs (generally through certain services offered only to clients of Private Wealth Management). Any statement contained in this presentation concerning U.S. tax matters is not intended or written to be used and cannot be used for the purpose of avoiding penalties imposed on the relevant taxpayer. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you may disclose to any person the US federal and state income tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and tax structure, without Goldman Sachs imposing any limitation of any kind. Investors should be aware that a determination of the tax consequences to them should take into account their specific circumstances and that the tax law is subject to change in the future or retroactively and investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or transaction.

Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. This material is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon the client’s investment objectives.

Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this presentation and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only.

Company names and logos, excluding those of Goldman Sachs and any of its affiliates, are trademarks or registered trademarks of their respective holders. Use by Goldman Sachs does not imply or suggest a sponsorship, endorsement or affiliation.

Index Benchmarks

Indices are unmanaged. The figures for the index reflect the reinvestment of all income or dividends, as applicable, but do not reflect the deduction of any fees or expenses which would reduce returns. Investors cannot invest directly in indices.
The indices referenced herein have been selected because they are well known, easily recognized by investors, and reflect those indices that the Investment Manager believes, in part based on industry practice, provide a suitable benchmark against which to evaluate the investment or broader market described herein.

This information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by GSAM and is not financial research nor a product of Goldman Sachs Global Investment Research (GIR). It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research. The views and opinions expressed may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and GSAM has no obligation to provide any updates or changes.

Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. It should not be assumed that investment decisions made in the future will be profitable or will equal the performance of the securities discussed in this document.

Confidentiality

No part of this material may, without GSAM’s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient.

© 2021 Goldman Sachs. All rights reserved. Date of First Use: 7/22/2021. 246939-TMPL-07/2021-1444292