At Vanguard, we have a calling to champion personal retirement outcomes. Through our close relationships with plan sponsors, we see the individual behind every financial decision, and we advocate for their long-term success as if it were our own.
Investors’ success is Vanguard’s primary focus each and every day. Our unique ownership structure informs everything we do.* As a client-owned company, there is no other group of owners besides our clients so our focus at Vanguard is entirely on you, the client. No other mutual fund company can say that.
And we’re constantly improving to serve you better. We have a history of rejecting the status quo and have built our name on a world-class approach to plan design, portfolio management, and driving results for the participants we serve. We have always been among the first and strongest advocates for innovations in plan design and portfolio construction that ultimately benefit participants.
Our 18th edition of How America Saves highlights some of the great progress we’ve made and how plan sponsors’ emphasis on plan design is positively impacting employee retirement savings behavior:
- About 60% of participants in Vanguard-administered DC plans were invested in a professionally managed allocation by year-end 2018. The growing use of target-date funds (TDFs) continues to drive this trend.
- About 9 out of 10 plan sponsors offered TDFs; 97% of participants were in plans offering TDFs; 77% of participants used TDFs; and 52% were invested in a single TDF.
- About 48% of Vanguard plans had adopted automatic enrollment, and 61% of new plan entrants were enrolled via automatic enrollment.
We’re proud of the progress we’ve made, but there’s more work to be done. We’re also conscious of the headwind that plan sponsors face as they seek to continue to increase participation and contribution rates, and improve portfolio diversification. Vanguard has always been a steadfast partner to plan sponsors, but in 2019 and the years ahead, we’ll strengthen our relationships through innovations designed to drive better retirement outcomes.
Over the coming months, we will be announcing initiatives aimed not only at improving investors’ ability to create enduring financial security but also at reimagining retirement planning for a digital age. We’re building these initiatives around three pillars: better plan design, better investor behaviors, and better client experiences.
We’ve been privileged with partners who share our passion to help participants. Vanguard now serves more than 5 million participants across our DC recordkeeping business—and we remain as committed as ever to the institutional business. We’re honored and humbled that plan sponsors continue to place their confidence in us to work every day to guide their employees on the road to financial security, above and beyond any individual retirement goal.
In short, we look forward to working with you to help your participants build financial wellness that can last a lifetime.
* Vanguard is client-owned. Client-owned means that fund shareholders own the funds, which in turn own Vanguard.
- All investing is subject to risk, including the possible loss of the money you invest.
- Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in target-date funds is not guaranteed at any time, including on or after the target date.