In this article from Pensions & Investments, NEPC’s Mike Contorno shares perspective on the growing momentum behind small defined contribution plans and pooled employer plans, as well as the increasing pressure for consolidation among record keepers. Read the full article on the Pensions & Investments website.
Some of the biggest growth prospects for record keepers are coming from some of the smallest defined contribution plans, thanks to regulatory changes, competition for scale in a crowded market and greater interest among sponsors.
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“The industry has struggled with overcapacity,” said Michael Contorno, principal and head of DC vendor management at the NEPC consulting firm, who expects more consolidation among larger record keepers.
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“We have 20, but it could be eight or 12,” he said. “There are too many providers chasing clients.”
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Contorno said record keepers can adjust to the crowded market by pursuing deals with PEPs. “If you’re not in it, what chances do you have to succeed?” he said.
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Among the largest players, record keeping remains a scale business, especially for companies facing financial challenges when competing against the industry’s giants, said Bill Ryan, a former long-time DC plan consultant for NEPC who joined Carlyle Group in January as managing director and head of retirement solutions.
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