According to MFS Investment Management’s Sean Kenney, his three sisters would all fall within the same target-date age cohort, but their lifestyles and retirement goals are completely different.
His oldest sister, married with three kids, makes a middle-class income, doesn’t have a lavish lifestyle and loves being at home. Kenney’s twin sister, single with no kids, has a high-paying job and is a frequent traveller but wouldn’t spend $2.50 on a coffee. His youngest sister and her husband make the most money as a family unit, have two kids and an expensive lifestyle.
“They all have the same goals: they want to maximize their risk-adjusted return and get to a fully-funded status to have income for retirement,” said Kenney, co-head of MFS’ global distribution, during Benefits Canada’s 2025 Defined Contribution Investment Forum. “But their [retirement] income needs are different.”
As DC plans become the primary workplace savings option in many countries, DC pension management has become more sophisticated, he said, noting the proliferation of target-date funds has helped to achieve strong retirement savings balances for diverse groups of plan members. However, the industry is still trying to solve the “wildly heterogenous, diverse problem of retirement income,” he added.
Counter to the industry’s focus on manufacturing products to solve for these problems, Kenney said he believes the best thing for serving plan members and driving outcomes.
The industry has tended to avoid financial advice, but DC plan sponsors and their institutions don’t need to be the advice providers, he said, noting they can instead leverage other expertise such as managed accounts and robo solutions in the plan, financial wellness programs or making advice accessible by bringing in financial advisors from the community to engage with and educate members.
Read: Words to use and words to lose in retirement, pension communications
On the accumulation side, Kenney said the industry needs to focus more on member outcomes. He noted a drive in the U.S. towards the least expensive solutions and efforts to minimize litigation risk. “It isn’t always the lowest cost, simplest solution [that achieves member outcomes]. There’s plenty of innovation around accumulation that we can all lean into.”
He said he expects to see a growing uptake of private assets in DC plans, pointing to recent supportive guidance from the U.S. Department of Labor. “I think the narrative is really strong. You’ve got young people investing for multiple decades with very little liquidity requirements that need to maximize risk-adjusted returns over . . . multiple market cycles.”
Read more coverage of the 2025 DC Investment Forum here.