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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
2020 Defined Benefit Administration Survey
Ask the Experts
Clarification of Loan Repayment Delay Provisions of CARES Act
Experts from Groom Law Group and Cammack Retirement Group answer questions concerning retirement plan administration and regulations.
Compliance
Use of Fidelity Active Management Funds Questioned in Court
Multiple lawsuits have been filed recently that question the offering of active management funds to retirement plan participants.
Administration
Get Beneficiary Designation and Missing Participant Practices in Order
The pandemic has highlighted the need for plan sponsors to actively encourage revised beneficiary designations and have missing participant procedures in place.
Investing
Improving Participant Outcomes With Custom TDFs
Off-the-shelf TDFs may not meet the needs of participant demographics, so plan sponsors can build custom TDFs to provide greater diversification and less risk near retirement.
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