CITs take the lead in target-date assets; income is next

Twenty years ago, Congress passed the Pension Protection Act of 2006. The law introduced qualified default investment alternatives, automatic enrollment, and automatic escalation, making target-date funds the default for most defined-contribution plans. The target-date market has since changed vehicles. Assets in mutual fund and collective investment trust target-date series totaled $5.3 trillion on June 30, an 11% gain in the first half of 2026, according to Sway Research's mid-year report as carried by PLANADVISER.

Since the end of 2022, target-date assets have climbed 88%, an annualized gain of 20%. Collective investment trusts overtook mutual funds as the leading target-date vehicle in 2024. As of June 30, CITs held 55% of assets, one percentage point more than at the end of 2025. Mutual funds held 45%. At the start of the decade, the split was 58% mutual funds and 42% CITs. Sway counts six mutual fund target-date series launched since then. The same period produced 75 trust series.

With the accumulation structure settled, target-date providers are turning to spending. Sway says larger balances have made income features more attractive to participants looking to decumulate, customize, and diversify into new markets. Income-embedded target-date funds finished June at $164 billion, an 18% gain since the end of 2025. The broader market rose 11%.

The income category is concentrated. TIAA and Nuveen control 51% of income-embedded target-date assets, about $84 billion. TIAA's Secure Income Account already powers products from Empower Annuity Insurance Co. of America and Great Gray Trust Co. It will also anchor new income-focused target-date series from Vanguard and Transamerica expected in the second half of 2026. Transamerica's series will pair the engine with investments from T. Rowe Price.

That makes TIAA an engine supplier to rivals while it sells its own version through the Nuveen partnership. If the Vanguard and Transamerica series take hold, the Secure Income Account becomes the default structure for target-date income, in the way collective investment trusts became the default for accumulation. If they stall, the category stays with the firms that built it.

BlackRock's LifePath Paycheck held $30 billion in income-embedded target-date assets at the end of June. Fidelity and Principal, two other large target-date providers, have also announced plans to introduce income offerings.

Twenty years of automatic enrollment built the $5.3 trillion market. The next decade decides who gets paid when that money comes out. TIAA's licensing play is an early claim on that revenue.