With that in mind, Richard Fulford, executive vice president and head of U.S. retirement at the firm, has compiled six investment themes he suggests plan sponsors should consider as they try to navigate between the Scylla of rising interest rates and the Charybdis of returning inflation.

Read: Stable value funds may gain in popularity with plan sponsors

While market turmoil may prevent interest rates from increasing much this year, despite projections from a number of sources, and inflation still remains "modest," it's worth having a look at these suggestions, which Fulford says should be considered as plan sponsors "have an opportunity to refine their plan menus to improve retirement outcomes."

Read: 10 questions retirement plan sponsors need to ask

Following are the six themes he suggests, along with a glimpse at the factors behind his reasoning.

1. Go custom.

"The decision to implement a custom target-date option is perhaps the most important one related to DC investment design," Fulford says.

Going custom can be motivated by plan demographics that just don't fit into a mold; it can allow plan sponsors better control while boosting the potential to improve participant outcomes—all persuasive reasons.

With no less an authority than the Department of Labor suggesting in guidance to fiduciaries of 401(k)s and other retirement plans that they consider custom solutions, and with increasing accessibility of such solutions thanks to advances in recordkeeping, custody and trust capabilities, Fulford points out that even "[p]lans under $500 million can access semicustom glide path solutions through their recordkeeper, gaining many of the benefits of fully custom approaches."

2. Employ active management.

Fulford pointed to Morningstar data to back up "the view that active fixed income management has the potential to deliver value well in excess of fees, while passive management necessarily delivers returns equal to index returns minus fees."

Active intervention in a rising interest rate environment, he argued, may be better able to manage risks.

And while active management could run counter to plan sponsors' desire to keep fees low, he reminds readers that "low fee, passive strategies do not equal participant value."

Active management could not only better handle risk, he said, but also help participants do better while also "deflect[ing] heat from the growing fiduciary spotlight."

3. Augment core bonds with income.

Core bonds bring three benefits: income, capital preservation and equity diversification.

But with interest rates likely to rise, that's probably not enough—particularly since those rates are likely to rise slowly, and not to heights previously seen.

Higher yields, as a result, could come to outshine returns over time.

Global or multisector, income-focused bonds that bring in funds from credit, mortgage, emerging market, and other sectors could therefore provide broader investment opportunities while also possibly mitigating the effects of rising interest rates.

4. Add diversified inflation hedging.

Defined contribution plan sponsors have been reluctant to add real asset exposures to plans because of low inflation rates globally that in turn have lowered expectations.

But, argues Fulford, PIMCO expects inflation to increase this year to 1.5–2 percent in the U.S., while the market has only priced in expectations of less than 1 percent.

That opens the door for real assets to provide "real returns that hold potential to build and preserve participant purchasing power," as well as offering the possibility of beneficial portfolio diversification should stocks and bonds suffer in a rising inflation environment.

If only one real asset option is being considered, he says, "sponsors might consider a multiasset approach that combines real asset categories including Treasury Inflation-Protected Securities (TIPS), commodities and real estate investment trusts (REITs), among others."

5. Hedge international equities.

Equities' prominent place in DC plan portfolios, along with "broadly full valuations" because of strong returns over the last several years, has strengthened the case for "further diversification into non-U.S. equities," Fulford says.

But not hedging that non-U.S. diversification against the currencies in question has cut returns, since other countries' currencies have depreciated significantly against the U.S. dollar. It's also exposed participants to significant volatility.

PIMCO is forecasting additional U.S. dollar appreciation against other currencies, so Fulford recommends that sponsors consider adding a hedged option to plans' unhedged international equity holdings to help diversification.

6. Review capital-preservation-focused options.

Money market funds may no longer be adequate as a capital preservation option, thanks to new SEC rule reforms that will take place in October.

While MMF companies have already been acting on the upcoming rule changes to broadly switch DC offerings to government MMFs, that could result in low to negative yields and short supply of G-MMFs.

What to do? Look to "capital-preservation-focused alternatives that we recommend for evaluation, including stable value, short-duration fixed income and white label (or custom) bond vehicles that combine these and other strategies," says Fulford.