How Plan Design Shapes the Value of Managed Accounts
The 2026 Managed Accounts Research Series
This analysis uses Morningstar's Defined Contribution Outcomes Model (DCOM) to examine how key plan design features — default contribution rates, auto-escalation, and employer matching — shape the incremental value that managed accounts delivers. By controlling for age, wage, and tenure, the research identifies plan structure as a primary factor determining how much opportunity remains for managed accounts to help improve participant outcomes.
The results give plan sponsors a practical lens for evaluating managed accounts in their specific context. Where defaults are low and escalation is absent, managed accounts were shown to help improve projected retirement balances by 20–30% for younger participants, most notably ages 25-29. In more highly structured plans, the incremental lift is smaller because participants are already on stronger savings trajectories. Even so, managed accounts continue to add value through personalization, portfolio optimization, and individualized guidance.
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Research on Plan Design Shaping the Value of Managed Accounts
The data of more than 3 million participants across thousands of employer-sponsored defined contribution retirement plans was included in Morningstar Investment Management’s study, “Analyzing the Value of Managed Accounts”. Participant data was included based on available information and various filters for those who used a managed account service during the 2024 calendar year. As the data was anonymized, Morningstar Investment Management has no knowledge if the data includes participants who were enrolled in the Morningstar Retirement Manager Managed Accounts service. Morningstar Investment Management's study, "How Plan Design Shapes the Value of Managed Accounts", leverages the data from the “Analyzing the Value of Managed Accounts” study and builds on prior work in the Morningstar Center for Retirement & Policy Studies' Managed Accounts Research Series. The full DCOM framework incorporates more than 40 plan design permutations to evaluate how these elements jointly influence the value of managed accounts.
In no way should any performance shown be considered indicative or a guarantee of the future performance of an actual participant's portfolio with the same investment option or viewed as a substitute for an investment option recommended to an individual participant. Actual results of an individual participant may differ substantially from the historical performance shown for an investment option and may include an individual participant incurring a loss. Past performance is no guarantee of future results.
Performance returns were calculated using a time weighted, geometrically linked rate of return formula. Returns for periods over one year are annualized.
Morningstar Investment Management does not guarantee that the results of their advice, recommendations, or the objectives of an investment option will be achieved.
In no way should the results of this analysis be considered indicative or a guarantee of the future performance of an actual participant using Morningstar Retirement Manager or considered indicative of the actual performance achieved by an individual participant using Morningstar Retirement Manager.
To download the full “Analyzing the Value of Managed Accounts” research paper, please go to: {ad2ccf06-9f9c-4111-ad31-e434d6896342}_Analyzing_the_Value_of_Managed_Accounts.pdf
To download the full “How Plan Design Shapes the Value of Managed Accounts” research paper, please go to: www.morningstar.com/business/insights/research/how-plan-design-affects-managed-accounts-value
A ratio above 1.0 indicates higher projected balances under managed accounts relative to the baseline. A prediction of 1.1 means the model expects a 10% increase in the wealth-to-salary ratio at age 65 compared to the baseline. All specifications include controls for age, wage, and tenure, allowing us to compare plan-design differences while reducing the influence of observable participant composition. Some limitations of the analysis include:
- Matching effects may appear muted due to heterogeneous behavioral responses across participants.
- Results are conditional on current plan environments and underlying fee assumptions.
- The model does not fully capture job transitions or behavioral shocks, which may affect long-term outcomes.
While the analysis controls for age, wage, and tenure, unobserved differences in participant engagement may remain. However, the consistency of results across plan designs and participant segments suggests that the observed patterns are strongly linked to plan structure rather than solely participant selection.
A strong age gradient is present in all results. The incremental value of managed accounts declines steadily with age, regardless of plan design. At younger ages (mid-20s to mid-30s), MA value can exceed 20–30% in less structured plans, while comparable improvements in highly structured plans are typically in the low single digits. By age 60, the incremental gains typically fall to low single digits across all configurations. We define “less structured” plan environments as those with lower default contribution rates, no auto-escalation, and/or voluntary enrollment. This reflects both compounding dynamics and the reduced time horizon for behavioral improvements to affect outcomes.