The guide provides a checklist for periodic reviews, key questions to ask and items to consider.
Tag: target-date funds
A retirement plan’s default investment could have drawbacks for some employees.
Ninety-four percent said they would keep all or at least some of their money in a target-date fund that guaranteed an income stream for life, an AllianceBernstein survey found.
Many participants see the match percentage as a suggestion for how much to save; the majority of participants support automatic plan features; and even participants who are hands-on with investing like TDFs, J.P. Morgan found.
MassMutual debuts RetireSMART TDF series with J.P. Morgan glide paths, while AXA doubles down on SRI/ESG integration.
Securian Incorporates Custom Investment Models and American Century Expands ETF Suite.
Among those who did trade, the majority put assets into fixed income vehicles.
SSGA is following the trend of providers lowering investment fees, and sees an opportunity to attract 403(b) plan sponsors.
Lincoln Financial creates personalized target-date portfolios; Aon Hewitt-managed pooled funds claim compliance with GIPS; Vanguard launches Global Credit Bond Fund; and more.
Morningstar warns that the distinction between "active" and "passive" target-date series has become more muddled in recent years.
Vanguard expands commission-free ETF transactions; MassMutual and T. Rowe Price create TDF collaboration; Johnson Investment Counsel adds Charles River as wealth management business; and more.
In addition, Vanguard found among its book of business a large increase in the number of small businesses offering retirement plans to employees.
There are a number of investment vehicles to consider when drafting a plan menu that best suits the plan's participants.
“[When] investors commit to consistent investment regimes, investor returns are strong and the gaps are often positive," Morningstar says.
Vanguard believes it’s an important part of due diligence to consider custom options.
When constructing their own retirement portfolio, about 10% of participants still hold extreme allocations—either 0% or 100% equities.
MassMutual introduces new TDFs, and Krane Funds Advisors creates CIT for retirement plans.
According to Jake Tshudy at SEI, “An actuarial valuation approach akin to a DB plan is the best strategy to determine if a TDF series has the appropriate level of risk based on a plan’s demographics.”
Target-date fund designs should take into account the risks retirement plan participants face—how to correlate and corral the evolving sources of market, event, longevity, inflation and interest rate risks.