"While each thread plays a role individually, only when woven together do they create a strong fabric," the report said.

These innovations included asset allocation solutions, alternatives, open architecture, product packaging and customization.

1. Asset Allocation Solutions

Increasing adoption of automatic plan features and innovation with retirement income has increased preference for asset allocation solutions like target date strategies and managed accounts.

As a result, target date assets grew quickly on the back of strong flows over the past decade. According to the report, the target date market has roughly $1.3 trillion in assets, and target date approaches appear to be a clear favorite of regulatory agencies.

Current areas of innovation within the target date market include tactical flexibility, use of alternative strategies and open architecture.

Meanwhile, managed accounts are another asset allocation solution that provides sophisticated drawdown strategies, often taking into account specific guaranteed income products. The report points to data from Plansponsor magazine that shows managed accounts oversee $200 billion in participant assets.

Managed payout funds are a more recent addition to the retirement solutions scene, according to the report.

"Structured to provide a consistent, inflation-adjusted monthly income stream for a fixed term or the life of the retiree, these funds resemble annuities," the report said. "But they differ in some important ways, not least of all by being less expensive and more flexible."

Payouts also might fluctuate significantly depending on fund performance, according to the report.

"In any case, this type of fund, where the manager is responsible for distribution in addition to asset allocation, could well become another popular default option," the report said.

2. A Growing Role for Liquid Alternatives

As the report pointed out, many portfolio strategists call for a 10% to 20% allocation to alternatives "in order to be effectively hedged against daily risk and outlier events."

"The potential for liquid alternatives is quite large, should a minimum allocation be achieved," the report said. "For perspective, if all target date strategies were to adopt a modest 7% allocation in liquid alternatives, then a $90 billion market opportunity is created.

There are opportunities for alternatives outside target date strategies, too. According to the report, multistrategy alternatives could be offered on the core menu or as a specialty strategy only available through a managed account.

"The scope of alternatives available is also expanding, as asset classes such as private equity are increasingly made available for embedding into retirement plans," the report said.

While liquid alternative assets plateaued in 2015, the report indicated the potential for inclusion in retirement plans may reinvigorate product development efforts among managers.

3. Open Architecture Expansion

"The trend toward open architecture plans and the defined contribution investment only market is driven by the fact that few investment organizations can manage all strategies well and that having all assets managed by one manager has embedded risks," according to the report.

The regulatory drive toward fee transparency has also led to an unbundling of services, and some of the largest bundled providers are those with strong target date and stable value businesses, according to the report.

 "The opportunity of DCIO cannot be ignored if managers want to take part in the new retirement landscape," the report said.

According to the report, DCIO assets are projected to account for 63% of the market by 2020.

The report pointed to data from Strategic Insight that estimates that DCIO accounted for 57% – or $3.4 trillion – of total DC-managed assets (excluding self-directed brokerage and company stock) at year-end 2014. And, as the report pointed out, this doesn't factor in the trend of target date funds featuring third-party managers, which account for another $100 billion of assets.

4. Custom Solutions

While custom solutions have long been considered an option available at only the largest plans, the report found that customization is increasingly moving down market in a cost efficient manner.

According to the report, there are three ways in which customization is moving down-market: Participant advice, managed account solutions and turnkey solutions.

"Plan sponsors are evaluating custom asset allocation solutions to meet unique plan demographic needs and to incorporate sophisticated investment strategies in a cost-efficient manner," the report said.

And, as the report pointed out, the DOL released guidance in February 2013 on target-date fund selection and suggested to "inquire about whether a custom or nonproprietary target-date fund would be a better fit for your plan."