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week ending January 3rd, 2020
For defined contribution (DC) plans, the proper asset allocation is important for retirement savings outcomes. Since a large number of DC plan participants are invested in target-date funds (TDFs), that’s one reason TDF providers are considering different types of investments in the underlying portfolios. For DC plan participants who choose investments on their own, the presentation of the investment lineup can have an effect on whether they implement the right portfolio. The challenge of lower assumed returns and the low interest rate environment is also leading defined benefit (DB) plan sponsors to consider diversifying from the traditional liability-driven investing (LDI) portfolio. In this edition of PLANSPONSOR Weekend, we offer insights on optimal asset allocations.
Editor's Choice
Administration
Proper Asset Allocation Often Overlooked, Sibson Says
The right allocation could boost returns over a person's career by as much as 34%, the consulting firm says.
Investing
Updating TDFs to Provide Better Retirement Income
Three ideas for a qualified default investment alternative (QDIA) design that will better serve participants ready to retire.
Investing
Private Equity Could Boost DC Plan Participant Returns
Research finds including private equity in balanced and target-date funds offers return and diversification benefits.
Data and Research
Researchers Find Bias When Retirement Funds Listed Alphabetically
Retirement plan participants tend to select funds placed in the first positions on a list, so rather than ordering the investment menu alphabetically, researchers suggest placing lower-cost or lower volatility funds near the top to help participants.
Investing
What DB Plans Can Learn From Insurance Companies
Insurance companies take on pension risk, so why wouldn’t DB plan sponsors take lessons from insurer’s investment strategies?
Popular Reads
Administration
Participants Will Need Support to Understand Lifetime Income Projections
Recordkeepers are bolstering education, projection modeling tools and tailored advice capabilities to support plan participants and encourage them to remain on track for retirement income planning.
Data and Research
DB Plans Retain Cost Advantage Over DC Plans
New research by the National Institute on Retirement Security reaffirms earlier findings on the greater cost savings and efficiencies provided by pensions as compared to defined contribution plans.

Compliance
Milliman Accused of Failing to Prune Bad Investments From 401(k)
A lawsuit alleges that the poor performance of a suite of target-risk funds resulted in a nearly $250 million loss to participant accounts.
Data and Research
Equity Compensation Increasingly Becoming an Important Financial Benefit
More than one-quarter of employees surveyed by Morgan Stanley at Work said equity compensation helps them meet their long-term goals.
Data and Research
2021’s Hardships Redefine Financial Wellness Goals
With so many Americans having gone through tough times over the past two years, a new study looks at how this has affected their financial well-being and sense of the future.
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