J.P. Morgan Asset Management is simplifying its 401(k) plan menu. The company announced it is replacing its traditional menu of investment choices it offers to defined contribution plans and replacing it with a simplified menu of three investment portfolios: one consisting of diversified stock strategies, one with diversified bond strategies and one with diversified cash alternatives.

The new approach, called Core Menu Innovation, “represents our most advanced thinking on how to help Americans achieve a more financially sound retirement," said Michael Falcon, head of retirement for J.P. Morgan Asset Management. "The 401k plan is the primary retirement savings vehicle for most Americans today, so it's critical that we help participants make better investment decisions. J.P. Morgan research shows that participants, who choose to invest on their own, rather than in some form of professionally managed solution, are, on average, falling short of their retirement savings goals. We have to help them close that gap, and we believe CMI is one way to do so."

Plan sponsors are searching for ways to increase participant engagement and consolidate their investment line-ups. The Core Menu solution provides fewer, but more sophisticated, investment options and leverages the diversification benefits offered by target-date funds and other professionally managed asset-allocation solutions.