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week ending February 7th, 2020
Whether you’re a defined benefit (DB) or defined contribution (DC) plan sponsor, a well-created investment policy statement (IPS) can be your road map for investment selection and monitoring. A starting point in developing an effective IPS is to determine what investment categories you want to include in your investment lineup or investment portfolio. Fred Reish, partner in the employee benefits and executive compensation practice group of Faegre Drinker Biddle, says for DC plans, it is almost inevitable that plan sponsors will want to include target-date funds (TDFs). But there are many variables to consider when selecting which TDF series will be right for your participants. Looking at participant demographics will inform many decisions when it comes to investment selection and asset allocation. DC plan sponsors should also consider what investments or investment help will be right for pre-retirees and retirees. This edition of PLANSPONSOR Weekend offers information to help you with your investment decisions.
Editor's Choice
Investing
Steps for Creating an Effective IPS
While not required, a road map for investment selection and monitoring is a best practice, and sources now say the more detailed, the better.
Investing
Research Shows Positive Effects of TDFs
Various beneficial changes to retirement savings portfolios made by investing in TDFs could enhance retirement wealth by as much as 50%, research suggests.
Investing
The Case for TDFs That Mix Active and Passive Management
PIMCO says a mix of the two makes sense, especially assigning the fixed income portion of the portfolio to active management due to outperformance.
Investing
Consider the More Conservative Investments Pre-Retirees Should Hold
With potentially lower future returns and low interest rates, plan sponsors should reexamine plan investments to help participants with retirement income.
Investing
Don’t Leave Retiring Plan Participants Hanging
Many people are confused about how to invest in retirement, so they will need help before and after they do so.
Popular Reads
Compliance
CARES Act Passes Congress, Including Retirement Plan Relief
Plan sponsors who have faced regional natural disasters will be familiar with many of the relief provisions adopted by Congress, from the suspension of required minimum distributions to the doubling of loan limits.
Compliance
Retirement Plan Provisions Included in Senate’s Stimulus Package
Among other things, the bill would allow for targeted, penalty-free access to tax-qualified accounts for those hit hardest by the health crisis.
Administration
Plan Sponsors Facing Difficult Decisions During Coronavirus Pandemic
Stopping employer matching contributions, laying off employees, adjusting DB plan contributions; plan sponsors need to understand the effects of each decision.
Ask the Experts
Coronavirus-Related Distributions From 403(b) and Governmental 457(b) Plans
Experts from Groom Law Group and Cammack Retirement Group answer questions concerning retirement plan administration and regulations.
Compliance
SECURE Act Eases Paths for DB Plans
A new minimum age for in-service withdrawals and permanent nondiscrimination testing relief ease plan sponsors’ ability to keep older employees and protect their benefits.
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