Despite market volatility, few participants in defined contribution (DC) plans served by Vanguard made one or more portfolio trades during the year, and 96% of all assets available for distribution due to a separation of service were preserved in a retirement savings account.
Tag: defined contribution plans
A Cerulli Associates report explains how different alternative investments can help a derisking defined benefit (DB) plan with liability hedging as well as risk-seeking.
Researchers argue that financial illiteracy impedes plan participants’ ability to determine how to invest their savings, and propose mandated employer-provided financial education to address limited employee financial literacy.
While start-up plans do offer beneficial provisions for retirement plan participants, PLANSPONSOR’s 2018 Defined Contribution Survey finds not all of them are yet using plan designs and governance practices that are recommended in the industry.
Stressing what can be lost or gained, peer reviews and comparisons and certain plan design features are among the suggestions offered by the International Foundation of Employee Benefit Plans in a white paper.
“Growing emphasis on financial wellness, concerns about lack of retirement income options within employer-sponsored plans, increasing customization for the participant, and fiduciary concerns could spur additional growth in managed accounts,” Cerulli contends.
Cerulli Associates found fee sensitivity and the notion that environmental, social and governance (ESG) investing entails a trade-off in performance are two broadly applicable headwinds to ESG adoption.
Analyzing a group of plans, pairing certain plans with others that had match formulas that mimic or simulate the stretched match strategy, Vanguard found the former had participation rates that are 20% to more than two times higher than the latter.
While the 2018 PLANSPONSOR DC Survey shows that, in many ways, not-for-profit health care DC plan sponsors have adopted more “best practices” for their plans than those in the for-profit segment, the for-profit plan sponsors have more confidence in participants achieving retirement income goals.
Long-term 401(k) participation, savings and investing trends have also been positive, due in no small part to automatic plan features, according to a report from Fidelity Investments.
Opinion: Lame duck session offers a chance for cooperation on a helpful retirement reform.
In addition, to help employees reduce their debt stress and maximize their retirement plan savings, more employers are developing financial wellbeing initiatives, Arthur J. Gallagher & Co. found.
Willis Towers Watson believes plan-wide statistics on mean or median participation rates, balances or contribution rates measure aggregate data on all participants but offer little in the way of insight into retirement adequacy and meaningful benchmarks for individuals or segments of the population.
ICI finds that two factors appear to influence DC plan participants’ loan activity: reaction to financial stresses and a seasonal pattern.
An Insights article from Cammack Retirement notes how different fixed income vehicles perform under a rising interest rate environment and suggests DC plan sponsors offer a diverse menu of options for participants.