Target-date funds have substantially grown in popularity within employer-sponsored defined contribution retirement plans, according to a survey released Wednesday by NEPC, an independent investment consulting firm. As of the end of 2019, 39% of assets in defined contribution plans were in target date funds while only 22% were in 2010.

The number of plans offering target date fund investment options has remained steady at 96% of plans, said the “Defined Contribution Plan & Fee Survey” by Boston-based NEPC. Ross Bremen, a partner and member of the defined contribution practice group at NEPC, said in an e-mail, “It is no surprise that all the money is flowing to target date funds.

Most participants will set it and forget it after being automatically enrolled in target date funds. Auto features and participant inertia have largely contributed to the increase in target date fund assets, and inertia keeps participants from making changes, so once they are set up, they just let their assets invested in target date funds grow.”

Bremen added, “The vast majority of plan sponsors have chosen target date funds as their qualified default investment. Sixty-eight percent of the plans in our survey now offer automatic enrollment, up from 51% 10 years ago. Many plans have also adopted automatic increase as well, with 52% of plans now offering the feature.

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