Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
July 26th, 2018
Editor’s Note
PLANSPONSOR is pleased to bring you this special edition NewsDash newsletter, sponsored by Franklin Templeton, focused on retirement income. Americans are increasingly responsible for saving for their retirement, managing their savings during their working years, and turning those savings into sustainable retirement income.  Unfortunately, too few retirement plans offer solutions that assist employees in turning those savings into regular retirement income. Franklin Templeton recognizes that participants are all unique and that there is no “silver bullet” retirement income solution that will meet the needs of every participant. Yet we, as an industry, allow ourselves to make some seemingly reasonable assumptions to help inform the way we structure our plans. What if those assumptions don’t accurately capture the real world complexity faced by most households? We propose that some of these assumptions that underpin common thinking in the defined contribution (DC) industry are misguided and meaningfully affect our approach to the retirement spending challenge. We believe that a great deal of options exist that can help households fit the DC plan into the context of their complex and unique retirement plan. And we think it’s critical that these investment options are accompanied by retirement-oriented tools and advice, retirement-friendly plan design/document provisions, and targeted communications.
Helping Pre-Retirees Prepare for Drawdown
The Anchor Leg of the DC Plan: Helping Participants Finish Strong with a “Retirement Tier”
In this topic paper, a trio of Franklin Templeton experts share a unique perspective on what they see as the next area of focus and innovation in the DC industry: the development of a “Retirement Tier.” Read more >
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Six Surprises About Planning for Retirement Income
Franklin Templeton Investments 2018 Retirement Income Strategies and Expectations (RISE) Survey uncovered six findings that may surprise you. Read more >
Innovating to Address the Unarticulated Needs of Participants
As participants age, their financial needs and contexts evolve. While early-career participants may be treated as a more homogenous group, late-career participants’ situations become more unique and more complex. However, many participants are not aware of exactly what their changing retirement planning needs are. In the spirit of seeking better outcomes, we ought to consider how to meet these often unarticulated needs. That’s what innovation is all about. Read more >
Companies Form Alliance for Lifetime Income
Twenty-four financial services companies have formed the Alliance for Lifetime Income, whose objective is to educate Americans about the importance of protected lifetime income solutions. The group plans to do this with online and offline content, tools, thought leadership, events and new terminology to simplify this complex topic. Read more >
Investment Solutions for Retirement Income
Using Defined Maturity Bond Funds and QLACs to Better Manage Retirement Risk
In recent research conducted by professors Michael Finke, Ph.D and Wade Pfau, Ph.D., CFA from the American College, it was determined that defined maturity bond funds with defined payouts and qualifying longevity annuity contracts (QLACs)—either as standalone solutions or in tandem—increase the likelihood that participants will be able to achieve household retirement spending goals. Read more >
Top Trends in Defined Contribution
In this video, Drew Carrington, Head of U.S. Institutional Defined Contribution at Franklin Templeton, discusses the most pressing industry challenges and opportunities impacting plan sponsors. Read more >
Retirement Income Risks and Assumptions
Fiduciary Implications of Flexible Retirement Income Solutions
Although comprehensive retirement income solutions may be top of mind, partial solutions used on their own, or in combination with other retirement income investment solutions, can efficiently target specific goals while potentially preserving needed liquidity, portability and flexibility. Franklin Templeton outlines the fiduciary roles and responsibilities for evaluating, selecting and overseeing retirement income options. Read more >
DC Plan Sponsors Are Focusing on Long-Term Retirement Objectives
According to a survey, “Advancing the Way We Think About Retirement Risk and Outcomes,” the largest concern among plan sponsors includes participants’ longevity risk (with 42% of plan sponsors indicating this as their top worry), and the capacity to gain greater retirement account balances over the long term, when selecting target-date strategies or other qualified default investment alternatives (QDIAs) for participants. Read more >
The Real Retirement Crisis: Assessing Retirement Savings Adequacy
Andrew G. Biggs, resident scholar at American Enterprise Institute, told attendees of the Plan Sponsor Council of America (PSCA) 71st Annual National Conference, that for most of his 20 years in the retirement industry, if someone had asked him if Americans are undersaving for retirement, he would have said they were. However, he’s been looking at the research and claims that indicate there is a retirement crisis in America and suggests they are understating what Americans will have for retirement income and overstating what they will need. “The outlook is more positive than what the stories tell,” he said. Read more >
Measurement of Retirement Success Varies Based on Different Assumptions
An analysis by the Employee Benefit Research Institute finds 57.4% of U.S. households are on track to be able to cover 100% of expenses in retirement, but if long-term care costs are removed from the equation, the percentage jumps to 75.5%. Read more >
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Editorial: Alison Cooke Mintzer alison.mintzer@strategic-i.com

Advertising: Paul Zampitella paul.zampitella@strategic-i.com

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