Defined contribution (DC) plan sponsors have a fiduciary duty when it comes to selecting and monitoring the investment choices they offer in their plans’ fund menus. They must understand how market conditions affect the types of investments they are offering. They have to make decisions about active versus passive investment options, and keep in mind the costs of investments while making what is best for plan participants their first priority. Some investments are harder to benchmark than others—such as target-date funds (TDFs). If plan sponsors feel they do not have the expertise to make wise choices or monitor investments, outside expertise can help. This week’s edition of PLANSPONSOR Weekend offers insights that may help DC plan sponsors with their fiduciary duties regarding investments. Have a wonderful long weekend!
An institutional investment approach uses outcome-oriented investments, broad asset class diversification, best-of-breed investment management, a thoughtful mix of active and passive strategies and are vehicle agnostic, a report notes.Read more >
The Government Accountability Office (GAO) says in other cases where plans may face complexity, such as selecting a target-date fund or monitoring pension consultants, the Department of Labor (DOL) has provided general information, including items to consider and questions to ask. It suggests that the DOL do the same with ESG investing.Read more >
The record bull market may cause retirement plan participants to be overly confident, but they need to understand market cycles and volatility so they can resist making the wrong investment and retirement savings decisions.Read more >
The agency says the proposal seeks to emphasize that climate change and other ESG factors can be financially material and that considering these elements can lead to better long-term risk-adjusted returns.