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Investment Insights
15 min

DC Pulse // April 2026

April 2026

Research, regulations, returns and trends in DC

MFS DC Takes

DC Regulatory and Legislative Happenings

DC Market Data

Investment Index Returns

MFS DC Takes

MFS 2026 MFS DC Plan Sponsor Survey Results Snapshot

MFS Workplace Retirement
Readiness Indicator

 

grade letter B

Retirement
Readiness

The average DC plan sponsor
scores a B on retirement readiness.

 

Personalized Advice
 

 

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70%

of plan sponsors say personalized
advice is very/extremely important
to driving better retirement outcomes.

 

Target Date Fund Benefits
 

 

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60%

of plan sponsors believe their TDF
is best at addressing diversification
risk (38%) or downside market risk (22%).

 

Lack of Demand for Privates

 

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Only 4%

of sponsors are likely to add
private assets in the next 12–18 months.

Midnight Dilemmas

 

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66%

say the evolving regulatory
and legislative landscape keeps
them up at night.

Use of Active Management

 

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78%

of mega plans offer active
investment options, which
is more than the average (at 65%).

                                                                                                                                             


The MFS 2026 DC Plan Sponsor Survey includes responses from 153 plan sponsors, representing over $400 billion in plan assets and nearly 1 million participants. Learn more about sponsor confidence, innovation and investment menu and plan design in the full results, Building Towards Better Outcomes.

 

Source: MFS 2026 US DC Plan Sponsor Survey. For survey methodology, please click here.

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DC Regulatory and Legislative Happenings  

What’s the Alternative Fiduciary Duty?

The DOL issued a proposed rule called “Fiduciary Duties in Selecting Designated Investment Alternatives,” known as the "Investment Selection Rule."

The proposed rule builds on the existing ERISA fiduciary process and is broader than addressing only the anticipated inclusion of alternative and private assets in DC plans, as it would apply to the selection of every investment option in a plan lineup. It calls for six factors that fiduciaries must assess and document when picking retirement plan investments: performance, fees, liquidity, valuation, benchmarks and complexity. Following these factors will provide fiduciaries with a safe harbor.

The rulemaking will have a 60-day comment period through the end of May.

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Forfeiture Case Updates

The DOL has filed four amicus briefs in favor of employers, arguing that the decision on how to use forfeitures is a “settlor” (nonfiduciary) function and is therefore not a fiduciary breach under ERISA.

Over the past two years, approximately 80 lawsuits have been filed challenging the use of forfeitures under ERISA. When district courts have ruled, they have largely sided with employers.

At least six dismissals have been appealed and the four amicus briefs noted above are in response to certain cases under appeal.

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Pension Risk Transfer (PRT) Lawsuits

The DOL has also inserted itself into pension risk transfer (PRT) litigation, by filing an amicus brief arguing participants who continue to receive their full pension benefits cannot sue simply because a plan sponsor transferred that responsibility to an annuity provider.

Over the past two years, there have been 13 lawsuits challenging PRTs.

The filing of the amicus brief is part of a broader DOL effort to issue more guidance and to rein in “regulation by litigation.” Similar to the amicus briefs filed with respect to forfeiture cases, the DOL argues that the decision to transfer a plan to an insurance company through a PRT is a settlor function that does not trigger fiduciary duties under ERISA.

Fiduciary Rule: Old and New?

The DOL supported a district court motion to vacate the Retirement Security Rule, which was the latest iteration of a fiduciary rule enacted under the prior administration.

The rule was set to go into effect in September 2024 but was challenged in court. In July 2024, two federal district courts issued a stay against the rule. Under the Trump administration, the DOL abandoned its defense of the rule and signaled its intent to issue a replacement rule.

In March 2026, the two federal district courts entered final judgments, vacating the rule. In response, the DOL restored the ERISA five-part test for determining whether a person is an investment advice fiduciary. It further noted it does not plan to revisit the rule through new rulemaking but may consider issuing additional guidance as needed.

Sources:

Federal Register: Fiduciary Duties in Selecting Designated Investment Alternatives
PLANSPONSOR: DOL Issues Starkest Warning Yet in Fourth Forfeiture Amicus Brief (February 2, 2026)
Winston & Strawn LLP: January 2026 Forfeiture Litigation Update (January 29, 2026)
PLANSPONSOR: DOL Backs Lockheed in PRT Complaint (January 9, 2026)
ERISA Litigation & Compliance: Plaintiffs’ Pension Risk Transfer Claims Don’t Stand: Verizon Scores Sweeping Dismissal, and DOL Urges Same Fate for Lockheed (January 13, 2026)
PLANADVISER: DOL Pursues Final Ruling to Strike Down Fiduciary Rule (March 11, 2026)
U.S. General Services Administration: Investment Advice Fiduciary Under ERISA (Spring 2025)
U.S. Department of Labor: US Department of Labor restores long-standing investment advice rule after pair of court decisions vacate 2024 retirement security rule (March 18, 2026)

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DC Market Data

Target Date Fund Dominance

Average number of funds held:

graphic showing average number of funds held is 3.6 across all participants and 5.2 excluding tdf users

Target Date Funds (TDF):

graphic showing 95% offer target date funds, 48% of plan assets in target date funds and 57% of contributions go to target date funds

Total TDF Assets: 

4.8 trillion usd total target date funds assets by end of 2025 with 20.3% growth over previous year
percent of particpants invested 100% in target date funds decreases by career stage

                                                                                                                                             


Takeaway: While TDFs may be ubiquitous, they are far from uniform. Understanding why a particular TDF is in a plan and what risks it is intended to manage, matters just as much as the decision to offer one in the first place.

Source: 
12025 NEPC DC Plan Trends and Fee Survey, Morningstar 2026 Target-Date Fund Landscape.

bar chart showing net flows by fund type by quarter from q1 2024 to q4 2025
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Investment Index Returns 

As of March 31, 2026 

BENCHMARK

10 YEARS

5 YEARS

3 YEARS

1 YEAR

YTD

3 MONTHS

BALANCE

Illustrative 60/40 Portfolio

9.26%

7.41%

12.36%

12.35%

-2.62%

-2.62%

EQUITY

S&P 500

14.16%

12.06%

18.32%

17.80%

-4.33%

-4.33%

Russell 1000® Growth

16.83%

12.76%

21.18%

18.81%

-9.78%

-9.78%

Russell 1000® Value

10.58%

9.43%

14.31%

15.87%

2.10%

2.10%

Russell 2000®

9.88%

3.77%

13.05%

25.72%

0.89%

0.89%

MSCI EAFE

8.38%

7.91%

13.62%

21.27%

-1.24%

-1.24%

MSCI Emerging Markets

7.80%

3.69%

14.84%

29.55%

-0.17%

-0.17%

MSCI ACWI

11.33%

9.49%

16.58%

20.01%

-3.20%

-3.20%

FIXED INCOME

Bloomberg US TIPS

2.66%

1.48%

3.18%

3.00%

0.26%

0.26%

Bloomberg US Aggregate

1.70%

0.31%

3.63%

4.35%

-0.05%

-0.05%

Bloomberg Global Aggregate

2.05%

0.81%

4.07%

3.49%

-0.15%

-0.15%

CASH

Cash

2.32%

3.49%

4.97%

4.22%

0.93%

0.93%

Sources:
SPAR, FactSet Research Systems Inc., MFS analysis. Illustrative 60/40 portfolio comprises 60% S&P 500 and 40% Bloomberg US Aggregate and is rebalanced monthly. This hypothetical example is for illustrative purposes only. MSCI indices shown are net returns. Returns for the Bloomberg Global Aggregate Index are hedged to USD.
Cash is based on returns for the FTSE 3-month Treasury Bill Index. 
The historical performance of each index cited is provided to illustrate market trends; it does not represent the performance of a particular MFS® investment product. It is not possible to invest directly in an index. Index performance does not take into account fees and expenses. Past performance is no guarantee of future results. You should consider your client’s financial needs, goals, and risk tolerance before making any investment recommendations.

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Disclosures

“Standard & Poor’s®” and “S&P®” are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and have been licensed for use by S&P Dow Jones Indices LLC and sublicensed for certain purposes by Massachusetts Financial Services Company (“MFS”). The S&P 500® is a product of S&P Dow Jones Indices LLC, and has been licensed for use by MFS. MFS’ product(s) is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates, and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, their respective affiliates make any representation regarding the advisability of investing in such product(s).

Frank Russell Company ("Russell") is the source and owner of the Russell Index data contained or reflected in this material and all trademarks, service marks and copyrights related to the Russell Indexes. 
Russell® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and/or underlying data contained in this communication. No further distribution of Russell Data is permitted without Russell's express written consent. Russell does not promote, sponsor or endorse the content of this communication.

BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively "Bloomberg"). Bloomberg or Bloomberg's licensors own all proprietary rights in the Bloomberg Indices. Bloomberg neither approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

Source FTSE International Limited ("FTSE") © FTSE 2022. "FTSE®" is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data and no party may rely on any FTSE indices, ratings and/or data underlying data contained in this communication. No further distribution of FTSE Data is permitted without FTSE's express written consent. FTSE does not promote, sponsor or endorse the content of this communication.

The views expressed are those of the author(s) and are subject to change at any time. These views are for informational purposes only and should not be relied upon as a recommendation to purchase any security or as a solicitation or investment advice from the Advisor. No forecasts can be guaranteed.

Unless otherwise indicated, logos and product and service names are trademarks of MFS® and its affiliates and may be registered in certain countries. 

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