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week ending March 6th, 2020
The proper allocation of retirement savings assets could boost returns over a person's career by as much as 34%, Sibson Consulting maintains. Educating participants about how to allocate their assets, while a good idea, can only go so far. Target-date funds (TDFs) are popular in retirement plans because they are believed to solve the problem of participants not being properly diversified in their investments and not allocating assets to the right investments for their age. However, differences in the underlying funds used in TDFs and differences in the movement of the glidepath can vary outcomes. These are factors defined contribution (DC) plan sponsors should evaluate when selecting TDFs. Still there are participants who do not invest in TDFs and select investments on their own. At least one report suggests target-risk funds could help those participants with proper allocations for their retirement savings. In this edition of PLANSPONSOR Weekend, you’ll find articles to help you make sure DC plan participants are investing properly.
Editor's Choice
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.
Dynamically Managed TDFs Paired With Higher Deferrals Equals Superior Results
GMO looked at the performance of various TDF factors over a 40-year period to help guide TDF selection.
Serving Up Target-Risk Strategies for ‘Forgotten Participants’
The main reason target-risk gave way to target-date is not that target-risk strategies are inherently inferior; instead, target-date funds have benefited from the added perceived simplicity.
How to Include Private Equity in DC Plans
Serge Boccassini, with Northern Trust Asset Servicing, explains how his firm has been doing so for 10 years.
Now Is the Time: The Retirement Tier
Peg Knox, Defined Contribution Institutional Investment Association (DCIIA) discusses the “retirement tier,” which allows a DC plan sponsor to broaden the plan’s goal from accumulation to decumulation.
Popular Reads
New Financial Audit Rule Increases Requirements for Plan Sponsors
Plan sponsors will be required to provide much more data, as well as certifications about plan administration and governance, and limited-scope audits will no longer be so limited.
2021 Recordkeeping Survey
Data and Research
Participants Missing the Full Match Remains a Big Problem
A new survey shows there are several reasons employees decide not to contribute to their retirement plans.
Deemed Distributions Can Be Triggered by More Than Just Loan Nonpayment
The IRS reminds retirement plan sponsors of rules that, if broken, can result in loan amounts being deemed distributions.
Parties in Church Plan Lawsuit Finally Get Preliminary Approval of Settlement
A judge found the interests of a subclass of terminated, vested participants were adequately protected in a newly proposed settlement.
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