Jack Bogle set out to prove that mutual funds could operate independently, and do so in a manner that would directly benefit their shareholders; he said this was necessary to address “major corporate conflict” inherent to the traditional approach to stock fund investing.
Despite investing towards return goals in the 5% to 8% range, many endowments and foundations surveyed by CAPTRUST say they are unwilling or unable to withstand significant volatility.
One of the toughest challenges facing plan sponsors is broadening the perspective of participants to look beyond what has happened in the markets in the last week or month, and to truly be strategic about their investing.
Cost reductions are evident across asset classes—not just in equity.
While there is strong optimism concerning the equity markets and long-term growth, there is also a lack of specific planning on the key topics of income planning, Social Security optimization, health care costs and more.
Since the last study of this kind by CEM Benchmarking, average DB fund costs have increased from 0.40% to 0.60%, whereas DC plan costs have remained constant at 0.39%; overall, DB plans outperformed DC plans in the last decade by only 0.46%.
ERISA requires plan sponsors to regularly monitor investment lineups to ensure they remain prudent—a task made more complicated by the multi-layered construction of target-date funds; a new paper points to the best practices of defined benefit plans for some guidance.
With the new opinion, the district court seeks to make clear where the line is when it comes to pleading standards in ERISA lawsuits.
Empower’s PlanVisualizer aims to create a holistic view of a client’s retirement plan in its current state, along with the ability to model how changes to key design elements can potentially affect participant preparedness.
The debate started when the American Council for Capital Formation published a sharply written report alleging that, as the group puts it, “CalPERS has prioritized relatively poor performing environmental, social and governance [ESG] investments at the expense of other investments more likely to optimize returns.”
Across mutual fund and collective investment trust target-date products, the top-three managers own 62.6% of the market, while the top 10 account for 88.9%.
According to plaintiffs, Ruane’s flagship fund, the Sequoia Fund, contained more than $25 billion in assets until the firm “engaged in a misguided and reckless investment strategy.”
If the target-date fund (TDF) is the most important feature of a given retirement plan, shouldn’t the choice of TDF set the stage for the recordkeeper search?
For the most part, the investment management expenses plans pay are significantly greater than additional billed expenses, and are generally between 85% and 90% of the total cost of the plan.
The median equity exposure of equally weighted TDF vintages is 60%; equity exposure ranges from as high as 68% to as low as 51%, according to an analysis by Callan.