Sponsors Considering Inflation Protection Strategies

Among the sponsors currently offering these strategies, a stand-alone Treasury Inflation Protection Securities (TIPS) is the most widely used option (24%) versus combining multiple asset classes (12%). Another 10% of sponsors intend to offer some type of strategy within the next year.   

Mercer also found 58% 233 plan sponsors polled have no intention of transitioning from mutual funds to other investment vehicles such as collective trusts and/or separate accounts.  For those sponsors who will be transitioning, 34% cited lower investment fees as the key rationale for the move.  

Of those respondents that offer fixed payout options, the majority of sponsors (80%) offer participants the option to purchase an annuity at retirement outside the plan. The payout of income is typically provided via a stand-alone investment option (59%).  

Although 50% of plans offer investment advice and/or managed accounts, usage among participants is very low. For investment advice, 68% of sponsors indicated usage is 10% or less and 71% of sponsors indicated that managed account usage is also 10% or less.