09:50 AM
TowerGroup Predicts Growing Demand for Defined Contribution Plans
TowerGroup (Needham, Mass.) is urging CTOs to prepare for an influx in demand for defined contribution plans. According to the firm's recently released research on the effects of the Pension Protection Act of 2006, changes initiated by the Act -- such as automatic enrollment and deferral provisions -- will result in a doubling of participant contributions in U.S.-defined contribution plans, reaching $204 billion in 2011.
Firms' increased attention to the defined-contribution channel and development of new investment products will result in increased demand for related technologies, TowerGroup predicts. New financial products are expected to take the shape of income-oriented investments for retirees, and advanced and increasingly customizable asset-allocation products.
Additionally, TowerGroup foresees the call for technology projects that improve the data and tools for competing for defined contribution assets. These may include customer relationship management systems, or reporting and analytics tools for consultants and financial advisers that influence plan sponsors. <<<