Defined-contribution plan assets will increase to $5.5 trillion by 2015, despite a projected $2 trillion in outflows as boomer retirement accelerates, according to a report by McKinsey in New York.
Automatic contributions are helping fuel that growth. McKinsey said target funds, where many automatic contributions land if the employee hasn’t made specific selections, will account for 60% of defined-contribution assets and revenues, or $1.7 trillion. These funds are likely to grow at the expense of active U.S. equity and stable value funds.
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