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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
2019 DC Best in Class Providers
From PLANSPONSOR’s annual Defined Contribution Survey, DC plan providers are evaluated and rated according to feedback from their own clients.
2019 DC Survey Standouts
Through PLANSPONSOR’s annual DC Survey, 14 providers received the highest marks when plan sponsors answered questions related to provider satisfaction.
Compliance
IRS Announces 2020 Contribution and Benefit Limits
The contribution limit for employees who participate in 401(k), 403(b) and most 457 plans is increased from $19,000 to $19,500.
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.
Data and Research
Few Retirees Receiving Income from the Three-Legged Stool
Only 6.8% receive income through Social Security, a defined benefit (DB) plan and a defined contribution (DC) plan, the NIRS found.
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