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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
DOL Offers Guidance for Locating Missing Participants
Guidance in three parts offers suggested processes for DC plans and DB plans and reveals errors DOL staff should look for.
2020 Recordkeeping Survey
Administration
The Mechanics of Moving to a PEP
With a lack of regulatory guidance, plan sponsors can rely on certain existing rules to know the steps to take if they decide to move from a single-employer plan to a pooled employer plan.
Benefits
What Employers Need to Know About HSAs
Experts share eligibility requirements, tax treatment rules and allowable expenses for health savings accounts.
Investing
Deciding Whether an Annuity Is Right for Your Plan Participants
Plan sponsors should look at participant needs to determine whether annuities would be a fit for their plan and, if so, which types of annuities meet those needs.
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