By the numbers:

The study surveyed 28 global DC funds representing over $6.3 trillion in assets.
60% of participants cited providing sufficient retirement income as the biggest challenge for the next decade.
The average asset allocation has shifted to 60% equities, 20% bonds, and 20% alternative investments.

The big picture: As DC plans have replaced traditional pensions in many countries, their shortcomings are becoming more apparent. The study points to a widespread misunderstanding among members that auto-enrollment or minimum contribution levels are sufficient for retirement.

This is forcing a pivot in attention from governments and plan sponsors toward "retirement adequacy" as the next major hurdle.
While most plans offer default pathways into retirement, member engagement remains low, with many making tactical, last-minute decisions rather than planning strategically over the long term.

Zoom in: In response to the income gap, plan managers are rethinking long-held investment philosophies.

A major shift to alternatives: The study found that allocations to alternative investments now equal those of bonds. This move into private markets is driven by a need to maximize long-term returns, especially as bond-heavy defaults appear increasingly limited.
Rethinking lifecycle funds: A growing consensus among plan managers is that traditional lifecycle funds are too conservative, particularly for younger members. Some are now exploring more aggressive strategies, such as time-dynamic risk budgets or even leveraged equities for early-career cohorts, to improve long-term outcomes.

What they're saying: "To resolve these concerns, there are only two core and fundamental ways to better address adequacy in retirement: first, greater contributions and second, greater long-term investment returns," said Jessica Gao, a director at the Thinking Ahead Institute.

SURVEY: Retirement Gap Fix May Take Decades for DC Plans

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