PLANSPONSOR Roadmap: What’s Changing in DC Plan Investment Menu Design

As plan sponsors change their investment menus in response to regulations, litigation and participant behavior, sponsors should take “measured risk” to drive plan and participant success, said Sean Bjork, a senior vice president of Hub Retirement and Wealth Management and president of Bjork Asset Management Inc., during a PLANSPONSOR webinar last week.

During the first session of the 2026 PLANSPONSOR Roadmap: Plan Investments series, “What’s Changing in DC Plan Investment Menu Design,” industry experts discussed how plan sponsors are considering participant needs as they innovate in their investment lineups.

Bjork began the session by stating that most of his clients have become interested in offering investments and products that might have seemed “scary” a few years ago, including private market investments.

While some “cutting-edge” innovations—such as in-plan retirement income and the incorporation of private assets in defined contribution plans—have not yet been broadly adopted, others that were only “talk” until recently are now showing up in menus, according to Bjork. He pointed to smaller-sized plans’ use of collective investment trusts as investment wrappers and a shift toward more active (or blended) strategy as examples. Plan committees are now more receptive to new ideas, even if they are neither “cutting-edge” nor the “first in line” to implement them.

According to PLANSPONSOR’s 2026 Plan Benchmarking Report, 30.7% of respondents reported using CITs, while among the largest plans, the usage rate was 65% to 68%.

The addition of private market assets into investment plan lineups may pick up among investment committees once the Department of Labor’s prudent investment rule is finalized, Bjork said. The 60-day comment period for the proposed rule ended June 1, and the DOL could publish its final rule by the end of 2026 or the first quarter of 2027, sources have said. How broadly the asset classes will be incorporated into plan menus after that remains to be seen.

Recently, Bjork said most of his clients have asked to be told what to do about their investment lineups—with reasoning behind it, of course—rather than make investment decisions themselves. He said that over the past 1.5 years, many more plans have expressed interest in a 3(38) investment management arrangement—outsourcing investment discretion—than would have before.

While one reason for a more hands-off approach might be “decision fatigue”—with sponsors finding it easier to hand off the investment decisions, which they are comfortable doing—Bjork said other reasons include the belief that doing so reduces both plans’ liability for investment selection and their comfort working with a given adviser.

The outsourcing mindset applies very much to handing off administrative tasks, but not as much to giving away plan design choices, Bjork added. Sponsors are willing to give up the “lower-hanging fruit,” but not the more complex, impactful design decisions.

Adelia Soremekun, senior director of total rewards at the Jackson Laboratory, said her company receives fiduciary guidance but prefers to make its own investment decisions rather than “rubber stamp” what it is given, for the most part. She said the Jackson Laboratory likes to “think through [changes] from the lens of [the] employees.”

Soremekun said that while the Jackson Laboratory has evolved its investment menu, it has done so cautiously.

“When you try something new, put [up] as many guardrails as you can,” Soremekun suggested to plan sponsors during the webinar. There is “no need to go big or go home.”

Soremekun also said that adding self-directed brokerage windows to a plan is an example of a way to innovate and cater to a diverse workforce, but with guardrails. A self-directed window—often an add-on to a retirement plan—allows participants to invest in a range of stocks, bonds and funds beyond the plan’s menu. The plan still holds the employee’s contributions in a tax-advantaged account, but the participant can direct some investments into a linked brokerage sub-account.

According to PLANSPONSOR’s 2026 Plan Benchmarking Report, 29% of responding plans offered a self-directed brokerage window, and that adoption was just higher than 60% among the largest plans.

The Jackson Laboratory’s willingness to innovate has been driven mostly by listening to participant feedback rather than because of the DOL’s increased “friendliness towards employers,” Soremekun says. By “friendliness,” she was referring to the DOL’s commitment to pushing back “regulation by litigation,” including by proposing a safe harbor for plan sponsors making prudent investment selections.

“If you have a retirement committee that’s well-rounded, and you’re lucky enough that they understand the nuances of a retirement plan, then you can take the approach we have,” Soremekun says. The individuals on the committee can “gut check each other.”