While managers of target-date funds have benefited from strong tailwinds in recent years, how can they manage the current environment of uncertainty? Ruthann Pritchard, an institutional portfolio manager at Fidelity Investments, cited the favourable conditions of 2017 and the healthy markets of the last nine years as examples of trends that often end abruptly before […]
With markets showing signs of potential extreme volatility in recent weeks, how can employers address the many questions that arise from pension plan members? When speaking to members, consultants usually emphasize advice on asset allocation based on age and risk tolerance. Many members aren’t honest in their responses, often overstating their tolerance for risk because markets are typically on the rise. […]
Net returns in defined benefit pension plans were higher than net returns in defined contribution plans by an average of 0.46 per cent annually over the last 10 years, according to new research by CEM Benchmarking Inc. That compares to the 1.8 per cent difference the last time the organization compared the performance, for the period […]
Target-date funds seek to provide members of defined contribution pension plans with a straightforward experience, adjusting their asset mix in a set-it-and-forget-it option geared towards achieving acceptable retirement outcomes. But the target-date fund world is diverse. There are differing features, including active and passive underlying funds, glide paths that go to or through a retirement date, […]
Sun Life Assurance Co. of Canada is introducing what it says is a “great bridge to decumulation” by launching new target-date funds that focus defined contribution pension plan members on their goal for retirement income. The funds, which will be available for group savings plans in 2018, will require plan members to set a retirement income target […]
When it comes to investing for retirement, do plan members benefit more from having target-date funds that come with a standard formula or funds that may change investment strategies over time depending on the portfolio’s performance? A recent paper published by the Social Science Research Network suggested that target-date funds may not be the most […]
Most target-date funds aren’t serving employees well, argues a paper published earlier this month in the Social Science Research Network. While target-date funds are an easy option for employees who aren’t comfortable with making investment decisions, the funds don’t consider employees’ desired retirement incomes or how well the portfolio fares over time, writes researchers Peter A. Forsyth, […]
To leave no one behind, defined contribution pension plans must adapt and innovate. That’s the message delivered by Daniel Morris, portfolio solutions manager with Schroder Investment Management Ltd., during his session at Benefits Canada’s 2017 Defined Contribution Plan Summit. A combination of contributions and return on investments determine the end result of plan savings, and […]
Target-date funds easier, simpler and secure: CAP Benchmark Report
Target-date funds continue to be the most common default investment option offered to members of workplace capital accumulation plans, according to new research by the Canadian Institutional Investment Network and Great-West Life Assurance Co. The 2016 CAP Benchmark Report found 50 per cent of defined contribution plan sponsors and 51 per cent of group registered […]