Your SlideShare is downloading. ×
0
Defined Contribution Investing Bringing Theory to Reality May 25, 2010
Today’s Presenters <ul><li>Robyn Credico, Senior Retirement Consultant </li></ul><ul><li>Sue Walton, Senior Investment Con...
Today’s Discussion <ul><li>Theory vs. Reality </li></ul><ul><li>Thinking Outside the Investment Boxes </li></ul><ul><li>Ho...
DC Plan Theories <ul><li>DC plans </li></ul><ul><ul><li>Are a supplemental savings vehicle for participants </li></ul></ul...
DC Plan Realities <ul><li>Defined contribution plans now account for 42% of global pension assets in the seven largest pen...
DC Plan Prevalence Among Fortune 100 Companies (For Newly Hired Employees) Note: For most years, data is based on the foll...
Social Security Can No Longer Be Relied Upon As Part of the Retirement Equation <ul><li>In 2009, more than 51 million Amer...
Future of Social Security? <ul><li>In May 2009, The Social Security Board of Trustees project that program costs will exce...
Worker Confidence that Social Security Will Continue to Provide Benefits of at Least Equal Value to Benefits Paid Today TH...
DC Plan Realities <ul><li>DC participants </li></ul><ul><ul><li>Regardless of background, education, and circumstances, an...
Relationship of 401(k) Balance to Current Pay for Participants Close to Retirement <ul><li>*Age 55+, >10YOS, Active, >$30k...
Financial Market Turbulence: Older Workers’ Retirement Security Confidence Declines Note: Due to rounding, percentages in ...
Plans for Retirement Mean: 67 years Source: Towers Watson 2010 Global Workforce Study — U.S. 1% Plans to Work After Reachi...
Delayed Retirement Will Most Likely Cause Increased Labor Costs and Reduced Employee Engagement If Older Workers Unable to...
Thinking Outside the Investment Boxes OUTSIDE THE BOX Equity Style Box Fixed-Income Style Box Source: Investopedia.com Gro...
Thinking Outside the Investment Boxes (cont’d) Participant engagement Governance level High High Low OUTSIDE THE BOX Index...
TW Investment Beliefs: Number and Type of Investment Options to Offer Participants <ul><li>The total number of investment ...
Investment Structure Options Participant engagement PLAN MANAGEMENT Tier 3 Funds Doers Tier 4 Take Charge Investors Tier 1...
TW Investment Beliefs: Target Date Funds <ul><li>The target date fund selected by a plan sponsor should have a glide path,...
TW Investment Beliefs: Target Date Funds (cont’d) <ul><li>Target date funds should incorporate all major global asset clas...
Target Date Fund Selection <ul><li>Process, process, process </li></ul><ul><ul><li>Determination of appropriate glidepath ...
TW Investment Beliefs: Stable Value <ul><li>Considerations for today’s market environment </li></ul><ul><ul><li>Continued ...
TW Investment Beliefs: Active Options <ul><li>The use of active management should be reserved for higher governance struct...
Benefits of Diversification PLAN MANAGEMENT
Distribution Options Variable Income Strategy Fixed Guaranteed Income Guaranteed Minimum Withdrawal Benefit (GMWB) Type of...
TW Investment Beliefs: Distribution Options <ul><li>Consideration of retirement income solutions and the appropriate selec...
TW Investment Beliefs: Distribution Options (cont’d) <ul><li>Retirement income solutions should exhibit the following esse...
TW Investment Beliefs: Distribution Options (cont’d) Reasons Why Companies Do Not Offer Lifetime Annuities Companies cite ...
Participant’s Retirement Outcome is Uncertain PLAN MANAGEMENT Participant’s Retirement Outcome  <ul><li>Approach to Saving...
Effective DC Plan Management Plan Design & Governance PLAN MANAGEMENT Plan Design  and Governance Participant  Engagement ...
Contact Details <ul><li>Robyn Credico </li></ul><ul><ul><li>Senior Retirement Consultant </li></ul></ul><ul><ul><li>901 N....
Disclaimer <ul><li>The information included in this presentation is general information only and should not be relied upon...
Upcoming SlideShare
Loading in...5
×

Defined Contribution Investing: Bringing Theory to Reality

707

Published on

With more institutional investors reassessing their defined benefit (DB) plans and placing a heavier emphasis on defined contribution (DC) plans, the outcomes of DC plan investments are more important than ever.

In this presentation, Towers Watson experts discuss effective DC plan management, focussing on how to bring DC investment theories to reality in today’s dynamic legislative environment.

Published in: Business, Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
707
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
24
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • I am CW, a consultant out of Towers Watson’s Chicago office. I have the distinct pleasure of working with some great clients implement their overall investment strategies, and I also serve as a national leader for helping TW clients implement their liability hedging allocations. With me is Marko Komarynsky, also out of Chicago, and head of US FI manager research. Together, we have enjoyed helping our clients over the last few years implement LDI strategies…and it hasn’t been boring. We hope you find today’s information useful.
  • We have broken out today’s discussion into four sections We’ll start with a brief history lesson and put the last few years in perspective This will be followed by a natural discussion of lessons learned over that time period. Then, we will move into a discussion of where we are now and discuss current market conditions. Lastly, we will provide what we believe to be the important considerations on implementing liabilty hedging allocations today.
  • DC plans Have increasingly become the sole retirement savings vehicle available to participants Several contributing factors Length of career with same worker Cost more predictable for DC plan Investment risk borne by participant in DC vs. plan sponsor in DB Pension Legislation made DB plans more expensive Declining stock market – higher unfunded status
  • Total DB Pension Plans 90 90 83 74 63 58 54 49 45 Traditional DB Plan 89 67 49 40 34 30 28 24 22 Hybrid Pension Plan 1 23 34 34 29 28 26 25 23* DC Plan Only 10 10 17 26 37 42 46 51 55
  • The graph below illustrates that 70% of workers are not too or not at all confident that Social Security will continue to provide benefits of at least equal value to the benefits retirees receive today Plan sponsors need to begin thinking about their DC plans as the primary retirement savings vehicle rather than a supplemental retirement savings vehicle!
  • In February 2009, Watson Wyatt surveyed 2,232 active employees and 904 retirees of non-government organizations with 1,000 or more employees to gauge the impact of the economic crisis on Americans
  • Once the level of governance is determined or confirmed, investment structures can be implemented to meet the needs of different participants with the governance capabilities. For example, a few plans offer only asset allocation types of funds Typically, however, participants clamor for more choice, so sponsors have added either a series of index funds across the various asset classes and/or actively managed choices. The more actively managed choices, the higher the level of governance is required to understand how assets are being managed and whether performance is explainable and understood. Finally, there is the option to offer mutual fund windows (mutual funds only) or self-directed brokerage accounts (any available publicly traded security or fund)- whether in addition to core options or, in some cases, alongside Tier 1 and or Tier 2 funds.
  • Transcript of "Defined Contribution Investing: Bringing Theory to Reality"

    1. 1. Defined Contribution Investing Bringing Theory to Reality May 25, 2010
    2. 2. Today’s Presenters <ul><li>Robyn Credico, Senior Retirement Consultant </li></ul><ul><li>Sue Walton, Senior Investment Consultant </li></ul>
    3. 3. Today’s Discussion <ul><li>Theory vs. Reality </li></ul><ul><li>Thinking Outside the Investment Boxes </li></ul><ul><li>Holistic Approach to DC Plan Management </li></ul>
    4. 4. DC Plan Theories <ul><li>DC plans </li></ul><ul><ul><li>Are a supplemental savings vehicle for participants </li></ul></ul><ul><ul><li>Provide a well constructed vehicle to facilitate participant investment decision-making </li></ul></ul><ul><li>DC participants </li></ul><ul><ul><li>Are sophisticated investors </li></ul></ul><ul><ul><li>Have the time, interest and knowledge to invest their portfolios </li></ul></ul><ul><ul><li>Maintain a long-term investment time horizon </li></ul></ul><ul><ul><li>Can easily distinguish investment styles and asset classes </li></ul></ul><ul><ul><li>Rebalance their portfolios to maintain an appropriate asset allocation </li></ul></ul><ul><ul><li>Save enough and invest appropriately for their age </li></ul></ul><ul><ul><li>Carefully read and review all communications and education materials provided </li></ul></ul><ul><ul><li>Take advantage of all plan features and benefits </li></ul></ul><ul><ul><li>Will be able to retire with dignity with the DC plan and personal savings </li></ul></ul>THEORY VS. REALITY
    5. 5. DC Plan Realities <ul><li>Defined contribution plans now account for 42% of global pension assets in the seven largest pension markets, compared with only 32% in 1999* </li></ul><ul><li>67.1% of workers considered their employer-sponsored DC plan as their PRIMARY retirement plan in 2006, compared to 25.8% in 1988 </li></ul>*Towers Watson Global Pension Survey 2010 , Source: Employee Benefit Research Institute, April 2, 2009. THEORY VS. REALITY
    6. 6. DC Plan Prevalence Among Fortune 100 Companies (For Newly Hired Employees) Note: For most years, data is based on the following year’s Fortune list. The today column reflects data through May 6, 2009 (based on the 2009 Fortune list) and includes future announcements for plan changes in 2009 and 2010. 1985 1998 2002 2004 2005 2006 2007 2008 DB plan DC plan Only 2008 marks the first time less than half of the Fortune 100 offered a DB plan to new hires. Today 90 83 74 63 58 54 49 45 10 10 17 51 55 90 46 42 26 37 0 20 40 60 80 100 Number of Companies THEORY VS. REALITY
    7. 7. Social Security Can No Longer Be Relied Upon As Part of the Retirement Equation <ul><li>In 2009, more than 51 million Americans received $672 billion in Social Security benefits </li></ul><ul><li>Social Security benefits represent approximately 40% of the income of the elderly </li></ul><ul><li>In 1935, the life expectancy was 77.5 years old, today it’s 83 years old </li></ul><ul><li>By 2034, there will almost twice as many older Americans as today – from 39.9 million today to 74.6 million </li></ul><ul><li>There are currently 3.2 workers for each Social Security beneficiary, by 2034, there will be 2.1 workers for each beneficiary </li></ul>Source: Fact Sheet published by the Social Security Administration THEORY VS. REALITY
    8. 8. Future of Social Security? <ul><li>In May 2009, The Social Security Board of Trustees project that program costs will exceed tax revenues in 2016 – one year sooner than last year’s report </li></ul><ul><ul><li>By 2016, there will not be enough workers to pay scheduled benefits at current tax rates. </li></ul></ul><ul><li>The projected point at which funds for the program will be exhausted in 2037 – 4 years sooner than last year’s report </li></ul>Source: Center for Retirement Research at Boston College, 2009. By 2037, the trust fund will be sufficient to pay only 76% of program costs. THEORY VS. REALITY
    9. 9. Worker Confidence that Social Security Will Continue to Provide Benefits of at Least Equal Value to Benefits Paid Today THEORY VS. REALITY
    10. 10. DC Plan Realities <ul><li>DC participants </li></ul><ul><ul><li>Regardless of background, education, and circumstances, an overwhelming majority of participants are not engaged in making on-going investment decisions or do not consider a long-term time horizon </li></ul></ul><ul><ul><ul><li>Most participant do not </li></ul></ul></ul><ul><ul><ul><ul><li>Rebalance </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Opt out of defaults </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Make changes at the right time </li></ul></ul></ul></ul><ul><ul><ul><li>Many participants </li></ul></ul></ul><ul><ul><ul><ul><li>Take loans, hardships withdrawals </li></ul></ul></ul></ul><ul><ul><li>Participants do not maximize plan benefits </li></ul></ul><ul><ul><ul><li>Participants save under the match level </li></ul></ul></ul><ul><ul><ul><li>Participants not saving to the legal limits </li></ul></ul></ul>THEORY VS. REALITY
    11. 11. Relationship of 401(k) Balance to Current Pay for Participants Close to Retirement <ul><li>*Age 55+, >10YOS, Active, >$30k in Pay </li></ul><ul><li>*100 equal a balance of 1 times pay </li></ul>THEORY VS. REALITY
    12. 12. Financial Market Turbulence: Older Workers’ Retirement Security Confidence Declines Note: Due to rounding, percentages in the change column might not be equal to the difference between percentages in the 2007 and 2009 columns. Sources: Watson Wyatt’s 2009 survey on The Effect of the Economic Crisis on Americans’ Retirements – Employee and Retiree Views. 2007 numbers based on T. Hill (2008), Watson Wyatt’s 2007 U.S. Surveys of Older Employees’ and Retirees’ Attitudes Toward Lump Sum and Annuity Distributions From Retirement Plans. THEORY VS. REALITY The percentage of workers aged 50-64 who are very confident in having enough resources to live comfortably five years into retirement has dropped 19 percentage points, from 63% in 2007 to 44% in 2009. 5 YEARS INTO RETIREMENT 15 YEARS INTO RETIREMENT 2007 2009 CHANGE 2007 2009 CHANGE Not at all confident 6% 10% 5% 9% 15% 6% Not too confident 4% 10% 6% 15% 21% 6% Somewhat confident 27% 35% 8% 42% 46% 4% Very confident 63% 44% -19% 34% 18% -16%
    13. 13. Plans for Retirement Mean: 67 years Source: Towers Watson 2010 Global Workforce Study — U.S. 1% Plans to Work After Reaching Retirement Age Expected Retirement Age THEORY VS. REALITY 49 or younger 50 – 54 55 – 59 60 – 64 65 – 69 70 – 74 75 or older Will work because I have to Will work, but not because I have to Will have a traditional non-working retirement
    14. 14. Delayed Retirement Will Most Likely Cause Increased Labor Costs and Reduced Employee Engagement If Older Workers Unable to Retire Lower cost if younger age Lower cost if lower pay Working 55 – 64 Younger Replacement Lower pay Total Labor Cost Overall labor cost savings may outweigh cost of retiree medical <ul><li>Considerations </li></ul><ul><li>Skill levels </li></ul><ul><li>Productivity </li></ul><ul><li>Replacement </li></ul><ul><li>Engagement </li></ul><ul><li>ADEA/age discrimination </li></ul><ul><li>Caution on softness of savings; highly variable and difficult to predict </li></ul>(lower % of pay) Engagement scores for employees who have to delay retirement for financial reasons are 10 percentage points lower than average (Towers Watson 2010 Global Workforce Study) THEORY VS. REALITY DB Pension Retiree Medical Active Medical Other (e.g., LTD) 401(k) FICA Total pay PTO Savings from lower pay and reduced benefit costs Active Medical Retiree Medical DB Pension Other (e.g., LTD) 401(k) FICA Total pay PTO Pay Benefits
    15. 15. Thinking Outside the Investment Boxes OUTSIDE THE BOX Equity Style Box Fixed-Income Style Box Source: Investopedia.com Growth Blend Value Small Medium Large Long Interm Short Low Medium High
    16. 16. Thinking Outside the Investment Boxes (cont’d) Participant engagement Governance level High High Low OUTSIDE THE BOX Index target retirement date or balanced funds Active core funds Mutual fund window Index funds Active target retirement date or balanced funds Custom target retirement date or balanced funds Custom core funds Managed accounts (professional management using core funds) Self-directed brokerage account Tier 1 Tier 2 Tier 3 Tier 4
    17. 17. TW Investment Beliefs: Number and Type of Investment Options to Offer Participants <ul><li>The total number of investment options offered to defined contribution plan participants should be limited to maximize governance budget, preserve asset buying power and facilitate participant engagement </li></ul><ul><li>Tiered investment approach is appropriate </li></ul><ul><ul><li>Meet the needs of the different types of participants in the plan </li></ul></ul><ul><ul><li>Facilitate more effective communication </li></ul></ul><ul><ul><li>Drive participant investment behavior </li></ul></ul><ul><li>The use of active management should be reserved for the higher governance and higher manager conviction structures </li></ul><ul><li>The delineation of investment style (value versus growth) has not proven to be additive for portfolio efficiency due to an increase for potential volatility and inconsistent utilization by participants to balance style effectively </li></ul>PLAN MANAGEMENT
    18. 18. Investment Structure Options Participant engagement PLAN MANAGEMENT Tier 3 Funds Doers Tier 4 Take Charge Investors Tier 1 Funds Delegators Different solutions for different participant needs Asset allocation funds Core funds <ul><li>All passive funds in major asset classes to allow participants ability to construct a diversified portfolio on their own </li></ul><ul><li>Individual funds or mutual funds allow participants to create customized asset allocations with primarily active funds </li></ul>Mutual fund window or self-directed brokerage account <ul><li>Individual securities or mutual funds outside of the plan offer flexibility for customizing portfolios </li></ul><ul><li>Target retirement date funds either through a mutual fund, commingled fund or custom funds </li></ul><ul><li>Portfolio automatically rebalanced to maintain target allocations </li></ul>Tier 2 Funds Allocators Index funds
    19. 19. TW Investment Beliefs: Target Date Funds <ul><li>The target date fund selected by a plan sponsor should have a glide path, asset allocation and implementation appropriate for the plan </li></ul><ul><ul><ul><li>Plan sponsors should consider investment beliefs, level of plan governance, participant demographics and behavior, and other retirement benefits available to participants </li></ul></ul></ul><ul><ul><ul><li>Availability of retirement benefits outside of a defined contribution plan may allow for a more aggressive equity glide path </li></ul></ul></ul><ul><ul><ul><li>High participant use of company stock in a defined contribution plan may lead to the selection of a more conservative equity glide path </li></ul></ul></ul><ul><ul><ul><li>Active management increases the governance burden because the plan sponsor must monitor the underlying active strategies in addition to monitoring the target date funds themselves </li></ul></ul></ul><ul><ul><ul><li>Active management should be considered only if it improves the likelihood that plan participants will be compensated for the risks they will bear </li></ul></ul></ul><ul><ul><ul><li>Glidepath driven by human capital approach or time horizon approach </li></ul></ul></ul><ul><li>Plan sponsors wanting a low governance or low cost solution should consider “off the shelf” passively managed target date funds </li></ul><ul><li>Custom target date strategies are recommended for plan sponsors who wish to customize the glidepath, investment manager selection, or both </li></ul>PLAN MANAGEMENT
    20. 20. TW Investment Beliefs: Target Date Funds (cont’d) <ul><li>Target date funds should incorporate all major global asset classes without any biases (style, cap, geography, etc.) to provide adequate diversification </li></ul><ul><li>The glidepath and asset allocation should be based on efficient frontier analysis and Monte Carlo stochastic forecasting using reasonable assumptions and methods that are fully explained </li></ul><ul><li>Target date fund managers should seek to maximize investment efficiency net of fees and should continually look to improve investment efficiency by considering modifications and new investment strategies as opportunities become available </li></ul><ul><li>Tactical asset allocation should be viewed as an active management strategy </li></ul><ul><ul><ul><li>For those managers who incorporate tactical asset allocation into the fund management process, the strategy should have a long track record of consistent value added, follow a disciplined repeatable process, and represent a small portion of total active management risk </li></ul></ul></ul>PLAN MANAGEMENT
    21. 21. Target Date Fund Selection <ul><li>Process, process, process </li></ul><ul><ul><li>Determination of appropriate glidepath </li></ul></ul><ul><ul><ul><li>Human capital versus time horizon </li></ul></ul></ul><ul><ul><ul><li>Needs of participants </li></ul></ul></ul><ul><ul><ul><li>Other plan benefits </li></ul></ul></ul><ul><ul><ul><li>Participant investment behavior </li></ul></ul></ul><ul><ul><li>Off the shelf versus custom </li></ul></ul><ul><ul><ul><li>Size of plan </li></ul></ul></ul><ul><ul><ul><li>Administrative flexibility </li></ul></ul></ul><ul><ul><ul><li>Plan governance </li></ul></ul></ul><ul><ul><li>Active versus passive </li></ul></ul><ul><ul><ul><li>Plan governance </li></ul></ul></ul><ul><ul><ul><li>Participant engagement </li></ul></ul></ul><ul><ul><ul><li>Sensitivity to fees </li></ul></ul></ul><ul><li>Potential impact from legislation and other governing bodies </li></ul><ul><ul><li>Participant disclosure and education </li></ul></ul><ul><ul><li>Plan sponsor checklist/selection process </li></ul></ul>PLAN MANAGEMENT
    22. 22. TW Investment Beliefs: Stable Value <ul><li>Considerations for today’s market environment </li></ul><ul><ul><li>Continued constraints on wrap contract capacity </li></ul></ul><ul><ul><li>Investment portfolio structure changes </li></ul></ul><ul><ul><li>Tightened wrap underwriting standards </li></ul></ul><ul><ul><li>Decline in fund crediting rates </li></ul></ul><ul><ul><li>Impact of financial reform legislation </li></ul></ul><ul><li>What should plan sponsors do? </li></ul><ul><ul><li>Understand current stable value structure, investment characteristics and contract terms </li></ul></ul><ul><ul><li>Confirm objectives for option </li></ul></ul><ul><ul><li>Evaluate underlying participant investment demographics in stable value option </li></ul></ul><ul><ul><li>Review stable value strategies and managers relative to other alternatives </li></ul></ul>PLAN MANAGEMENT
    23. 23. TW Investment Beliefs: Active Options <ul><li>The use of active management should be reserved for higher governance structures </li></ul><ul><li>Investment manager implementation should be considered as part of the investment selection process </li></ul><ul><ul><ul><li>Multi-manager approach should be employed for active mandates to ensure diversification and limit volatility </li></ul></ul></ul><ul><ul><ul><li>Vehicle selection should be driven by asset buying power, governance oversight capabilities and administrative flexibility </li></ul></ul></ul>PLAN MANAGEMENT
    24. 24. Benefits of Diversification PLAN MANAGEMENT
    25. 25. Distribution Options Variable Income Strategy Fixed Guaranteed Income Guaranteed Minimum Withdrawal Benefit (GMWB) Type of Purchase Immediate Deferred or Accumulation PLAN MANAGEMENT Postretirement Income options
    26. 26. TW Investment Beliefs: Distribution Options <ul><li>Consideration of retirement income solutions and the appropriate selection thereof should be driven by: </li></ul><ul><ul><ul><li>The governance capacity of the plan sponsor </li></ul></ul></ul><ul><ul><ul><li>The needs of the participants based on a review of plan demographics and investment behaviors </li></ul></ul></ul><ul><ul><ul><li>The availability of appropriate products to meet plan objectives </li></ul></ul></ul><ul><li>Plan sponsors must also consider regulatory requirements of annuity (or retirement income solution) selection: </li></ul><ul><ul><ul><li>Engage in an objective, thorough, and analytical search for selection of annuity providers for DC plans </li></ul></ul></ul><ul><ul><ul><li>Consider costs (including fees and commissions) in relation to benefits and services provided </li></ul></ul></ul><ul><ul><ul><li>Conclude that the annuity provider is financially able to make all future payments and that cost is reasonable </li></ul></ul></ul><ul><ul><ul><li>If necessary, consult with an appropriate expert for purposes of complying with safe harbor </li></ul></ul></ul>PLAN MANAGEMENT
    27. 27. TW Investment Beliefs: Distribution Options (cont’d) <ul><li>Retirement income solutions should exhibit the following essential features </li></ul><ul><ul><ul><li>Guaranteed lifetime annual income </li></ul></ul></ul><ul><ul><ul><li>Purchasing power protection </li></ul></ul></ul><ul><ul><ul><li>Actuarially fair product pricing </li></ul></ul></ul><ul><ul><ul><li>Simple to understand and communicate </li></ul></ul></ul><ul><ul><ul><li>Ability to implement under plan’s recordkeeping and advice systems </li></ul></ul></ul><ul><li>Retirement income solutions ideally exhibit the following desirable features </li></ul><ul><ul><ul><li>Greater investment customization flexibility and participant control over assets </li></ul></ul></ul><ul><ul><ul><li>Guaranteed income floor with potential for higher income tied to investment performance </li></ul></ul></ul><ul><ul><ul><li>Transferability to other investment options </li></ul></ul></ul>PLAN MANAGEMENT
    28. 28. TW Investment Beliefs: Distribution Options (cont’d) Reasons Why Companies Do Not Offer Lifetime Annuities Companies cite lack of participant demand as the primary reason they do not offer a lifetime annuity option. WW 2009 Survey n=149 n=113 Note: Because respondents could choose more than one option, the percentages do not add up to 100 percent. PLAN MANAGEMENT Unfamiliar with market offering 24% Market offerings are not satisfactory 26% Lack of participant demand 56% Administrative complexity 36% Other 13%
    29. 29. Participant’s Retirement Outcome is Uncertain PLAN MANAGEMENT Participant’s Retirement Outcome <ul><li>Approach to Savings </li></ul><ul><li>How much to save? </li></ul><ul><li>Where to save? </li></ul><ul><li>Approach to Investing </li></ul><ul><li>How to construct a risk–adjusted financially efficent investment program tailored to unique goals and constraints? </li></ul><ul><li>Approach to Distributions </li></ul><ul><li>How much to withdraw? When? </li></ul><ul><li>How to mitigate longevity risk? </li></ul>
    30. 30. Effective DC Plan Management Plan Design & Governance PLAN MANAGEMENT Plan Design and Governance Participant Engagement Fiduciary Investment Oversight
    31. 31. Contact Details <ul><li>Robyn Credico </li></ul><ul><ul><li>Senior Retirement Consultant </li></ul></ul><ul><ul><li>901 N. Glebe Road, Arlington, VA 22203 </li></ul></ul><ul><ul><li>703.258.8142 </li></ul></ul><ul><ul><li>[email_address] </li></ul></ul><ul><li>Sue Walton </li></ul><ul><ul><li>Senior Investment Consultant </li></ul></ul><ul><ul><li>191 North Wacker Drive, Suite 2100, Chicago, IL 60606 </li></ul></ul><ul><ul><li>312.525.2364 </li></ul></ul><ul><ul><li>[email_address] </li></ul></ul>C:Documents and Settingsadam.hweeMy DocumentsTEST 1.ppt
    32. 32. Disclaimer <ul><li>The information included in this presentation is general information only and should not be relied upon without further review by the appropriate professional advisors. Towers Watson is not a law firm or accounting firm, and we are not providing legal, accounting or tax services or advice. Some of the information included in this presentation might involve the application of law; accordingly, we strongly recommend that audience members consult with and involve their legal counsel and other professional advisors as appropriate to ensure that they are fully advised concerning such matters. Additionally, material developments may occur subsequent to this presentation rendering it incomplete and inaccurate. Towers Watson assumes no obligation to advise you of any such developments or to update the presentation to reflect such developments. </li></ul>
    1. A particular slide catching your eye?

      Clipping is a handy way to collect important slides you want to go back to later.

    ×