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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
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.
Deals and People
Marty Walsh Will Be Nominated as Secretary of Labor
Apart from potentially reversing course on fiduciary rule-related regulations, there are many other areas where sources suggest the next DOL Secretary could drive significant changes.
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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