Exploring the DC OCIO Model

Exploring the DC OCIO Model
May 4, 2026 9 mins

Exploring the DC OCIO Model

Exploring the DC OCIO Model

DC OCIO can save plan sponsors time, lessen fiduciary risk, and deliver potential fee savings all with the goal of enhancing participant outcomes

Key Takeaways
  1. DC OCIO allows asset owners to delegate tasks to outside professionals while maintaining a say in strategy.
  2. Adoption has grown rapidly in recent years.
  3. Now is the right time to consider DC OCIO as the market has matured to deliver even more scale and benefits.

Defined contribution (DC) plans have become the primary retirement vehicle for millions of participants, placing increasing responsibility on plan sponsors to deliver strong outcomes while navigating growing complexity. Investment menus have evolved, fiduciary expectations have intensified, and participant demographics continue to change. Against this backdrop, plan sponsors are reevaluating how best to govern and implement their DC investment programs.

One model gaining significant traction is Defined Contribution Outsourced Chief Investment Officer (DC OCIO). While OCIO arrangements are well established in defined benefit (DB) plans, their application in DC plans represents a meaningful shift in how sponsors approach investment oversight, risk management, and fiduciary delegation.

To better understand this evolution we asked Brian Abshire, Head of DC OCIO at Aon, to explore this topic.

What Is DC OCIO?

At its core, DC OCIO is a governance and implementation model where a plan sponsor delegates day-to-day investment decision-making responsibilities to an external fiduciary partner. This partner acts as an extension of the sponsor’s investment committee, typically assuming discretion over manager selection, monitoring, and ongoing adjustments—within the bounds of the investment policy statement approved by the sponsor’s investment committee.

In a traditional advisory relationship, consultants provide recommendations that committees consider, but the ultimate authority for decision-making and execution is retained by the plan sponsor. In contrast, a DC OCIO relationship is discretionary, where the DC OCIO assumes legal responsibility for decision-making and implementation.

From a practical standpoint, DC OCIO often encompasses:

  • Manager selection, replacement, monitoring, and reporting
  • Portfolio implementation including vehicle determination as well as coordination with recordkeepers and custodians
  • Implementation of ongoing innovations, such as incorporating new asset classes, custom solutions, or retirement income features when these items are approved by the plan sponsor

Key areas that make DC OCIO distinct from DB OCIO include the added complexity of participant investing behavior, regulatory scrutiny, and the importance of outcomes across diverse participant cohorts. Decisions must balance institutional investment rigor with simplicity, scalability, and participant usability.

Importantly, plan sponsors do not lose the ability to provide input with this model.

Sponsors retain oversight, define objectives, and monitor the OCIO’s effectiveness. The changes are: who executes decisions, how quickly those decisions can be made, and what the cost impact is for implementing those decisions.

Why Has There Been Significant Growth in the DC OCIO Space?

The growth of DC OCIO reflects a broader shift in how plan sponsors think about governance, capacity, and accountability.

First, plan fiduciaries are being asked to do more in their primary jobs. As a result, the time and attention available for detailed investment oversight has become increasingly constrained.

DC OCIO addresses this challenge by taking day-to-day investment work off the plate of plan fiduciaries. Rather than requiring committees to evaluate managers, oversee manger changes, complete documentation, and coordinate with plan administrators, those responsibilities are delegated to a specialist with the resources and mandate to act accordingly. This time savings is not just about convenience—it can improve governance by ensuring decisions are made promptly and consistently.

Second, fiduciary risk and litigation concerns continue to rise. The emphasis on prudent process, timely action, and documentation has increased the burden on committees. By appointing a DC OCIO, sponsors can transfer responsibility for specific investment decisions to a dedicated expert, reducing personal and organizational exposure while strengthening overall governance.

Third, scale has become increasingly beneficial. Larger pools of assets often receive more favorable pricing, and partnering with a DC OCIO allows plan sponsors to benefit from aggregated scale from all of the DC OCIO’s business that would otherwise be unavailable at an individual plan level.

Finally, the investment landscape itself is becoming more complex. Some DC plans now incorporate custom target date funds, white labeled options, diversified growth strategies, private market exposures, and/or retirement income solutions.

Evaluating and maintaining these components requires deep investment expertise and operational infrastructure that can be difficult for part-time fiduciaries to replicate.

Together, these forces—capacity constraints, fiduciary pressure, and the value of scale, and complexity—have driven meaningful adoption of the DC OCIO model.

Why Is Now the Right Time for Plan Sponsors to Consider DC OCIO?

Several current dynamics make this an especially relevant moment for sponsors to evaluate the DC OCIO model.

1. The DC OCIO market has matured significantly, with established providers, dedicated DC capabilities, and proven governance frameworks. Sponsors considering DC OCIO today are no longer early adopters, but rather beneficiaries of an institutionalized model with clearer fiduciary standards, greater transparency, and scalable implementation.

This maturity has reduced execution risk and expanded choice, making DC OCIO a more practical and accessible governance solution for a broad range of plans.

2. Fiduciary roles are expanding, not contracting. With heightened accountability and growing demands on their time, many committees are reassessing whether their current governance model is sustainable over the long term. DC OCIO offers a way to strengthen governance while reducing operational burden.

3. Recent growth in assets managed by DC OCIO providers has increased the potential for investment fee savings. By aggregating assets across multiple plans, some OCIO providers can often negotiate lower manager fees, access institutional pricing, and reduce implementation costs—benefits that can meaningfully improve net-of-fee outcomes for participants and help offset the cost of discretionary oversight.

Conclusion

DC OCIO represents a clear evolution in how defined contribution plans are governed and managed. For sponsors facing increasing complexity, heightened fiduciary responsibility, and limited internal capacity, the model offers a way to improve governance efficiency, enhance investment execution, and maintain a strong focus on participant outcomes, all at a potentially lower cost.

As the DC landscape continues to evolve, DC OCIO is likely to play an increasingly important role in helping plan sponsors meet the ultimate goal of delivering better retirement outcomes for participants.

Aon’s Thought Leader

Brian Abshire
Head of DC Multi-Asset Solutions & DC OCIO Aon Investments USA Inc.
[email protected]

Legal Disclosures and Disclaimers

Investment advice and consulting services provided by Aon Investments USA Inc. (“AIUSA”). The information contained herein is given as of the date hereof and does not purport to give information as of any other date. The delivery at any time shall not, under any circumstances, create any implication that there has been a change in the information set forth herein since the date hereof or any obligation to update or provide amendments hereto.

The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice.

Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting an investment strategy. Diversification and asset allocation do not ensure a profit or guarantee against loss. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results. Investment themes and potential action items are intended to help illustrate our investment and research process. It should not be assumed that any investment themes or potential action described will prove to be profitable or result in positive investment performance. Any forward-looking statements speak only as of the date they are made, and AIUSA assumes no duty to update them. Forward-looking statements are subject to numerous assumptions, risks, and uncertainties. Actual results could differ materially from those anticipated.

By receiving and reviewing this material, the recipient acknowledges the following: This material is a general communication being provided for informational and educational purposes only. It is not designed to be a recommendation of any specific investment product, strategy, or decision, and is not intended to suggest taking or refraining from any course of action. This material was not prepared and is not intended, to address the needs, circumstances, and objectives of any specific institution, plan, or asset pool. AIUSA is not providing advice in a fiduciary capacity under applicable law in providing this material, which should not be viewed as impartial, because it is provided as part of the general marketing and advertising activities of AIUSA, which earns fees when clients select its services. Prior to making any investment or financial decisions, any recipient of this material should seek individualized advice from their personal financial, legal, tax, and other professional advisors that takes into account all of the particular facts and circumstances of their situation.

The content of this document is made available on an “as is” basis, without warranty of any kind. AIUSA disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. AIUSA reserves all rights to the content of this document. No part of this document may be reproduced, stored, or transmitted by any means without the express written consent of AIUSA.

Aon Investments USA Inc. is a federally registered investment advisor with the U.S. Securities and Exchange Commission. AIUSA is also registered with the Commodity Futures Trade Commission as a commodity pool operator and a commodity trading advisor and is a member of the National Futures Association. The AIUSA ADV Form Part 2A disclosure statement is available upon written request to:

Aon Investments USA Inc.
200 E. Randolph Street
Suite 600
Chicago, IL 60601
ATTN: Aon Investments USA Inc. Compliance Officer

© 2026 Aon plc. All rights reserved.

5397660-NRC

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

Terms of Use

The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

Aon Insights Series Asia

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series Pacific

Expert Views on Today's Risk Capital and Human Capital Issues

Aon Insights Series UK

Expert Views on Today's Risk Capital and Human Capital Issues

Client Trends 2025

Better Decisions Across Interconnected Risk and People Issues.

Construction and Infrastructure

The construction industry is under pressure from interconnected risks and notable macroeconomic developments. Learn how your organization can benefit from construction insurance and risk management.

Cyber Resilience

Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.

Employee Wellbeing

Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.

Environmental, Social and Governance Insights

Explore Aon's latest environmental social and governance (ESG) insights.

Q4 2023 Global Insurance Market Insights

Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.

Global Risk Management Survey

Better Decisions Across Interconnected Risk and People Issues.

Regional Results

How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.

Impact Report 2025

Explore Aon's corporate sustainability impact and strategy.

Top 10 Global Risks

Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.

Industry Insights

These industry-specific articles explore the top risks, their underlying drivers and the actions leaders are taking to build resilience.

Human Capital Analytics

Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.

Human Capital Quarterly Insights Briefs

Read our collection of human capital articles that explore in depth hot topics for HR and risk professionals, including using data and analytics to measure total rewards programs, how HR and finance can better partner and the impact AI will have on the workforce.

Insights for HR

Explore our hand-picked insights for human resources professionals.

Workforce

Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.

Mergers and Acquisitions

Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.

Natural Resources and Energy Transition

The challenges in adopting renewable energy are changing with technological advancements, increasing market competition and numerous financial support mechanisms. Learn how your organization can benefit from our renewables solutions. 

Navigating Volatility

How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?

Parametric Insurance

Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.

Pay Transparency and Equity

Our Pay Transparency and Equity collection gives you access to the latest insights from Aon's human capital team on topics ranging from pay equity to diversity, equity and inclusion. Contact us to learn how we can help your organization address these issues.

Property Risk Management

Forecasters are predicting an extremely active 2024 Atlantic hurricane season. Take measures to build resilience to mitigate risk for hurricane-prone properties.

Technology

Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.

Trade

Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.

Transaction Solutions Global Claims Study

Better Decisions Across Interconnected Risk and People Issues.

Weather

With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.

Workforce Resilience

Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.

More Like This

View All
View All
Subscribe CTA Banner