DC Pulse // 1Q 2025 in Review
Research, regulations, returns and trends in DC
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MFS DC Takes
1Q2025
MFS DC Takes
MFS 2024 DC Plan Sponsor Survey Results Snapshot
MFS Workplace Retirement
Readiness Indicator
Retirement Readiness
The average DC Plan Sponsor only scores a C+ on retirement readiness
Retirement Income
51%
of sponsors will not implement in-plan retirement income solutions in the next 12 to 18 months
Stay in Plan or Leave
58%
of plans remain neutral about keeping participant assets in plan after retirement
Access to Advisors
69%
of plans currently offer adviso
Midnight Dilemmas
71%
say the evolving regulatory and legislative landscape keeps them up at night
Investment Committee Turnover
74%
of investment committee members have less than five years of committee tenure
The MFS 2024 DC Plan Sponsor Survey includes responses from 166 plan sponsors, representing over $125 billion in plan assets and over 1.1 million participants. Learn more about sponsor confidence, retirement income and investment menu and plan design in the full results, Building Towards Better Outcomes.
Sources: MFS 2024 US DC Plan Sponsor Survey. For survey methodology, please click here.
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DC Regulatory and Legislative Happenings
DC Regulatory and Legislative Happenings
Personnel Changes
Lori Chavez-DeRemer has been confirmed as Secretary of Labor under President Trump. During her confirmation hearing, she did not receive any questions about ERISA-related matters
Daniel Aronowitz has been nominated to lead the DOL’s Employee Benefits Security Administration (EBSA). He is currently the president of Encore Fiduciary, a fiduciary liability insurance underwriting company.
Regulatory Updates
President Trump issued an Executive Order that calls for any federal agency promoting a new rule, regulation or guidance, to identify at least ten existing ones to be repealed.
The current DOL filed a motion to hold its appeals in two court cases about the DOL’s fiduciary rule (also known as the Retirement Security Rule), noting the current administration needs time to familiarize themselves with the cases. The Retirement Security Rule was finalized in 2024 but hit legal roadblocks.
Litigation Implications
In Spence versus American Airlines, Inc., a federal judge ruled that fiduciaries violated ERISA’s duty of loyalty by putting corporate interests ahead of participants’ interests. Although not specifically about ESG investments, the case focuses on doing business with a partner whose proxy voting strategies and other actions support ESG-related issues. Damages from the case, if any, have yet to be decided and will likely determine the impact to the rest of the retirement market.
Damages from the case, if any, have yet to be decided and will likely determine the impact to the rest of the retirement market.
In Utah versus Micone, another federal judge upheld the consideration of ESG factors as a “tiebreaker,” upholding the current Biden-era ESG rulemaking. This case came before the court post-Chevron and many believe the Trump administration will eventually replace the rulemaking with its own.
Legislation Deja Vu
Bipartisan legislation has been reintroduced in the House and Senate to change securities laws to allow 403(b) plans to offer collective investment trusts (CITs). The bill is called The Retirement Fairness for Charities and Education Institutions Act of 2025.
This follows similar bipartisan legislation introduced in 2024 that was ultimately not acted on by year-end.
Supporters hope this legislation will be folded into a larger legislation package this year.
Sources:
https://www.plansponsor.com/senate-to-vote-on-confirmation-of-chavez-deremer-as-secretary-of-labor/
https://www.pionline.com/washington/president-donald-trump-nominates-daniel-aronowitz-lead-dol-retirement-agency-ebsa
https://401kspecialistmag.com/trump-executive-order-means-any-new-dol-regulation-requires-elimination-of-10-existing-ones/
https://www.planadviser.com/dol-files-pause-appeal-fiduciary-rule/
https://www.pionline.com/esg/federal-judge-rules-american-airlines-violated-erisa-esg-investments-401k-plans
https://www.afslaw.com/perspectives/environmental-law-advisor/esg-update-texas-federal-court-cites-loper-bright-upholding
https://www.plansponsor.com/bills-to-allow-cits-in-403b-plans-reintroduced-in-house-senate/
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DC Market Data
DC Market Data
Individual participants have more retirement confidence than plan sponsors
Individuals are more confident than sponsors, they value choice and control, but that confidence about retirement varies by generation. Consider your own plan confidence score and plan design to help set up participants for success.
Sources: Left and middle charts: ICI Research Report, January 2025: American Views on Defined Contribution Plan Saving, 2024. Right chart: Fidelity 2025 State of Retirement Planning. The generations are defined as: Baby Boomers (ages 60 to 78), Gen X (ages 44 to 59), Millennials (ages 28 to 43) and Gen Z (ages 18 to 27).
DC Market Data
DC plan assets reached $12.4 trillion, of which $8.8 trillion was held in 401(k) plans.
Sources: Investment Company Institute 2025. “The US Retirement Market, Fourth Quarter 2024” (March 2025). https://www.ici.org/statistical-report/ret_24_q4
Note: Hybrid funds invest in a mix of equities and fixed-income securities. The bulk of lifecycle and lifestyle funds is counted in this category.
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Investment Index Returns
Investment Index Returns
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.
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.
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.
1Q2025
MFS DC Takes
MFS 2024 DC Plan Sponsor Survey Results Snapshot
MFS Workplace Retirement
Readiness Indicator
Retirement Readiness
The average DC Plan Sponsor only scores a C+ on retirement readiness
Retirement Income
51%
of sponsors will not implement in-plan retirement income solutions in the next 12 to 18 months
Stay in Plan or Leave
58%
of plans remain neutral about keeping participant assets in plan after retirement
Access to Advisors
69%
of plans currently offer adviso
Midnight Dilemmas
71%
say the evolving regulatory and legislative landscape keeps them up at night
Investment Committee Turnover
74%
of investment committee members have less than five years of committee tenure
The MFS 2024 DC Plan Sponsor Survey includes responses from 166 plan sponsors, representing over $125 billion in plan assets and over 1.1 million participants. Learn more about sponsor confidence, retirement income and investment menu and plan design in the full results, Building Towards Better Outcomes.
Sources: MFS 2024 US DC Plan Sponsor Survey. For survey methodology, please click here.
DC Regulatory and Legislative Happenings
Personnel Changes
Lori Chavez-DeRemer has been confirmed as Secretary of Labor under President Trump. During her confirmation hearing, she did not receive any questions about ERISA-related matters
Daniel Aronowitz has been nominated to lead the DOL’s Employee Benefits Security Administration (EBSA). He is currently the president of Encore Fiduciary, a fiduciary liability insurance underwriting company.
Regulatory Updates
President Trump issued an Executive Order that calls for any federal agency promoting a new rule, regulation or guidance, to identify at least ten existing ones to be repealed.
The current DOL filed a motion to hold its appeals in two court cases about the DOL’s fiduciary rule (also known as the Retirement Security Rule), noting the current administration needs time to familiarize themselves with the cases. The Retirement Security Rule was finalized in 2024 but hit legal roadblocks.
Litigation Implications
In Spence versus American Airlines, Inc., a federal judge ruled that fiduciaries violated ERISA’s duty of loyalty by putting corporate interests ahead of participants’ interests. Although not specifically about ESG investments, the case focuses on doing business with a partner whose proxy voting strategies and other actions support ESG-related issues. Damages from the case, if any, have yet to be decided and will likely determine the impact to the rest of the retirement market.
Damages from the case, if any, have yet to be decided and will likely determine the impact to the rest of the retirement market.
In Utah versus Micone, another federal judge upheld the consideration of ESG factors as a “tiebreaker,” upholding the current Biden-era ESG rulemaking. This case came before the court post-Chevron and many believe the Trump administration will eventually replace the rulemaking with its own.
Legislation Deja Vu
Bipartisan legislation has been reintroduced in the House and Senate to change securities laws to allow 403(b) plans to offer collective investment trusts (CITs). The bill is called The Retirement Fairness for Charities and Education Institutions Act of 2025.
This follows similar bipartisan legislation introduced in 2024 that was ultimately not acted on by year-end.
Supporters hope this legislation will be folded into a larger legislation package this year.
Sources:
https://www.plansponsor.com/senate-to-vote-on-confirmation-of-chavez-deremer-as-secretary-of-labor/
https://www.pionline.com/washington/president-donald-trump-nominates-daniel-aronowitz-lead-dol-retirement-agency-ebsa
https://401kspecialistmag.com/trump-executive-order-means-any-new-dol-regulation-requires-elimination-of-10-existing-ones/
https://www.planadviser.com/dol-files-pause-appeal-fiduciary-rule/
https://www.pionline.com/esg/federal-judge-rules-american-airlines-violated-erisa-esg-investments-401k-plans
https://www.afslaw.com/perspectives/environmental-law-advisor/esg-update-texas-federal-court-cites-loper-bright-upholding
https://www.plansponsor.com/bills-to-allow-cits-in-403b-plans-reintroduced-in-house-senate/
DC Market Data
Individual participants have more retirement confidence than plan sponsors
Individuals are more confident than sponsors, they value choice and control, but that confidence about retirement varies by generation. Consider your own plan confidence score and plan design to help set up participants for success.
Sources: Left and middle charts: ICI Research Report, January 2025: American Views on Defined Contribution Plan Saving, 2024. Right chart: Fidelity 2025 State of Retirement Planning. The generations are defined as: Baby Boomers (ages 60 to 78), Gen X (ages 44 to 59), Millennials (ages 28 to 43) and Gen Z (ages 18 to 27).
DC Market Data
DC plan assets reached $12.4 trillion, of which $8.8 trillion was held in 401(k) plans.
Sources: Investment Company Institute 2025. “The US Retirement Market, Fourth Quarter 2024” (March 2025). https://www.ici.org/statistical-report/ret_24_q4
Note: Hybrid funds invest in a mix of equities and fixed-income securities. The bulk of lifecycle and lifestyle funds is counted in this category.
Investment Index Returns
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.
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.
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.