In the U.S., target-date funds in workplace retirement plans have grown from $5 billion in 2000 to $734 billion in 2018, with many benefits for plan members. A new working paper by Olivia Mitchell, a professor at the University of Pennsylvania’s Wharton School, and Stephen Utkus, principal and director of the Vanguard Center for Investor […]
If most defined contribution pension plan members who invest their own money underperform those who invest through professionally managed options, how can plan sponsors encourage more uptake of default options? “By understanding the drivers associated with acceptance of a default investment, plan sponsors and defined contribution plan consultants might have additional success getting more participants […]
For the fourth consecutive year, reviewing fees is the most important step defined contribution plan sponsors are taking to improve their fiduciary positions, with fees identified as the main priority for 2020, according to a new survey by U.S.-based investment consulting firm Callan. “With the amount of fee-related project work we see, it’s not surprising […]
More plan sponsors are considering eliminating the waiting period for employees to join their pension plan, at least for employee contributions, according to a new report on capital accumulation plans by Sun Life Financial. “It’s much easier for a new employee to adjust their spending to their first take-home pay than to give up money to […]
Fee compression is putting pressure on providers that are seeking to be more innovative in launching new target-date funds, prompting managers to consider more customization, according to new research by Cerulli Associates. The fee compression challenge is bolstering certain trends among target-date managers, including blending passive and active strategies, as well as the push towards […]
While target-date funds are intended to be used as a singular option in capital accumulation plans, many defined contribution plan members use them in conjunction with other investments, according to research by Morningstar Inc. The report noted more than 10 million DC participants are potentially in TDFs and other plan investments. “While combining target-date funds with […]
As a solution to employee inertia, many plan sponsors with defined contribution arrangements are looking at setting automatic features as their plan’s default option. When the Royal Bank of Canada redesigned its DC plan in 2012, it introduced auto-enrolment for all new plan members following a six-month waiting period. Before the change, employees had a […]
While target-date funds are intended to be used as a singular option in capital accumulation plans, many defined contribution plan members use them in conjunction with other investments, according to research from Morningstar. The report noted there are potentially more than 10 million DC participants in both TDFs and other plan investments. “While combining target-date […]
One in three (30 per cent) U.S. defined contribution plan sponsors have adopted a solution to deal with plan members’ need for a lifetime income, according to a survey by Willis Towers Watson. That’s up from 23 per cent in 2016, the last time the organization surveyed plan sponsors on this issue. The survey, which polled 164 large […]
While many glide paths are based on age, is there a case for adjusting these based on account balance fluctuations or on a plan member’s risk aversion? When it comes to optimal outcomes for members, considering risk aversion may be the most important factor, according to a new paper out of the Australian National University […]