Seventy percent think their approach will help employees retire at their targeted retirement age, compared to only 43% of plan sponsors without this specific plan design.
Tag: Target Date Fund
Morningstar observes more flows into target-date funds (TDFs) using collective investment trusts (CITs) and those investing in index mutual funds.
In the decade following the Great Recession of 2008, for participants who remained invested in their 401(k)s, overall, average balances soared 466%.
Participation rates were nearly 96% higher for plans—a difference of 40 percentage points—with auto enrollment; the usage of auto escalation was nearly five times higher in plans that employ opt-out options rather than opt-in, and employer match rates increased in 2018, T. Rowe Price found.
Use of managed accounts, target-date funds, individual advice and automatic placement into a qualified default investment alternative are on the rise, according to the Plan Sponsor Council of America.
J.P. Morgan makes recommendations for plan design and TDFs based on savings and withdrawal behaviors it analyzed.
Setting defaults too low, choosing the wrong default investment and offering company stock as an investment option could result in unintended consequences, BlackRock found.
Twenty-two percent do not know how their assets are invested, Legg Mason found in a survey.
Sixty-four percent of participants in their 20s own a TDF.
In 2017, target-date funds (TDFs) represent 41% of CIT assets in 401(k) plans, Cerulli Associates finds.
The right allocation could boost returns over a person's career by as much as 34%, the consulting firm says.
Most retirement plan participants would like savings and investing guidance, a survey finds.
Most Millennials are appropriately invested, with 90% of their portfolios in equities.
HSAs need to offer equities, multi-asset classes and fixed income, Devenir says.
Franklin Templeton creates additional active funds; Hartford Funds presents ETF focused on fixed income; First Trust introduces actively managed ETF; and more.
Bing Waldert, a managing director with Cerulli Associates, says, "converting the 401(k) plan to an income platform is a step in taking DB [defined benefit] market experience and applying it to the 401(k) market.”
In light of the market volatility, they fled from equities
Employer contributions and loans are also prevalent, a Brightscope/ICI report says.
The TDF series also takes a liability-driven investing approach to providing adequate retirement income.