Defined contribution (DC) plan sponsors face increasingly complex issues. Russell Investments has developed a priority list of eight ideas and actions to help plan sponsors guide their participants toward better decision-making as they save for retirement.
Ever ask: “How does our retirement plan compare to others?” Learn what Russell Investments believes all excellent DC plans share and actions you can take to help position your plan for excellence.
Cornerstone Wealth Management's July 2017 "Investment Insights" newsletter, focusing on the Dept. of Labor's Fiduciary Rule, which should reduce conflicts of interest and protect the interests of all investors.
Ever ask: “How does our retirement plan compare to others?” Learn what Russell Investments believes all excellent DC plans share and actions you can take to help position your plan for excellence.
Cornerstone Wealth Management's July 2017 "Investment Insights" newsletter, focusing on the Dept. of Labor's Fiduciary Rule, which should reduce conflicts of interest and protect the interests of all investors.
Money Matters - Tips for a Healthy NonProfit OrganizationStern Cohen LLP
Industry experts from Stern Cohen Accountants address key financial issues for your not-for-profit organization or charity. Learn best practices for the effective financial management of your NPO. This presentation covers: tips for a healthy balance sheet, understanding key metrics in your financial statements, managing cash flow, budgeting and forecasting.
Clark Schaefer Hackett created this buyer’s guide to help you and other plan fiduciaries make an informed decision when hiring a quality auditor for your employee benefit plan audit. This guide covers your fiduciary responsibilities, the timing of a plan audit, audit quality, finding the right auditor and more.
Now that fee disclosures are being delivered to employers and participants each year, how do you fulfill your fiduciary duty to determine the reasonableness of plan fees and communicate the information to employees?
An effective way is with a documented fee review process. Check out our presentation from a recent learning symposium for plan fiduciaries.
Everything about Performance Equity Compensation (or as much as fits into an ...PERFORMENSATION
The use of performance-based equity is on the rise. This presentation discusses how to select metrics, set goals,and design a plan. It also covers communication, accounting and administrative concerns.
Presented to BACA (Bay Area Compensation Association 10/21/2010)
The latest Retirement Plan News contains articles on the following: 1) Make Benchmarking Your Plan An Annual Exercise 2) Employer Contribution Trends 3) QDIAS Ten years On
Money Matters - Tips for a Healthy NonProfit OrganizationStern Cohen LLP
Industry experts from Stern Cohen Accountants address key financial issues for your not-for-profit organization or charity. Learn best practices for the effective financial management of your NPO. This presentation covers: tips for a healthy balance sheet, understanding key metrics in your financial statements, managing cash flow, budgeting and forecasting.
Clark Schaefer Hackett created this buyer’s guide to help you and other plan fiduciaries make an informed decision when hiring a quality auditor for your employee benefit plan audit. This guide covers your fiduciary responsibilities, the timing of a plan audit, audit quality, finding the right auditor and more.
Now that fee disclosures are being delivered to employers and participants each year, how do you fulfill your fiduciary duty to determine the reasonableness of plan fees and communicate the information to employees?
An effective way is with a documented fee review process. Check out our presentation from a recent learning symposium for plan fiduciaries.
Everything about Performance Equity Compensation (or as much as fits into an ...PERFORMENSATION
The use of performance-based equity is on the rise. This presentation discusses how to select metrics, set goals,and design a plan. It also covers communication, accounting and administrative concerns.
Presented to BACA (Bay Area Compensation Association 10/21/2010)
The latest Retirement Plan News contains articles on the following: 1) Make Benchmarking Your Plan An Annual Exercise 2) Employer Contribution Trends 3) QDIAS Ten years On
Grading the Pensions Protection Act, 10 Years LaterCallan
Do you remember the Pension Protection Act (PPA)? More than 900 pages of legislation touching seemingly every part of the retirement system. It presented challenges for defined benefits plans. Defined contribution (DC) plans instead saw beneficial provisions, including the permanence of certain provisions of the 2001 Economic Growth Tax Relief Reconciliation Act (EGTRRA) and the creation of safe harbors for using target date funds as defaults and for implementing automatic enrollment.
The PPA heralded a new era for DC plans with the potential to greatly increase workers’ access to retirement income security. But looking at the PPA’s report card, we do not see “straight As” over the last decade.
Many of the provisions took years to enact, and plan sponsors still seem to struggle with them. As the PPA celebrates 10 years, we ask: Was it successful? Did it transform DC plans in the way the industry had hoped? How can we do better?
Callan gives a grade to the performance of nine key PPA provisions over the past decade. We start with the least effective.
By 2025, many DC plan sponsors will likely adopt characteristics of the most successful pension plans to help put them on a path to create a fully funded retirement income stream for plan participants. Here are ten considerations
Plan Sponsors looking for lower-cost investment vehiclesDan Brennan
The rise of CITs and their broader availability means that plan sponsors should be evaluating these vehicles as part of their due diligence process when selecting investments for their plan lineup. Given the unique features of CITs compared with mutual funds and the different approaches providers take when constructing their products, evaluating these products may take an extra level of due diligence.
In this edition of Return On Investment, we have included information on the following topics:
1. The Importance of Risk Control
2. Are You Nearing the Age of 71?
3. Pension Reform: The CPP is Set to Change
4. Transferring Wealth: Preparing Your Heirs
5. Unclaimed Balances: Are Funds Owed to You?
6. Year-End Tax Planning Considerations
FINC 340 InvestmentsHow to Create an Investment StrategyThe .docxvoversbyobersby
FINC 340 Investments
How to Create an Investment Strategy
The creation of an Investment Policy Statement (IPS) is the most important step to take in creating a disciplined investment plan. Unfortunately, many plans fail to adjust return expectations to current market conditions. Today, large public pension plans are still forecasting return expectations at 7.5 percent.
Ultimately, if you lower return expectations; state and corporate pensions are required to make larger contributions. Furthermore, even those return expectations seem aggressive in such a low yielding market.
Currently we are in a market where the 10-year U.S. Treasury yields approximately 1.65 percent, the 10-year single A corporate composite yields approximately 2.79 percent, and the equity market has tepid expectations given weak growth prospects, low consumer and CEO (business) confidence and a great deal of uncertainty in 2013.
Thus, whether you are a large corporation forecasting pension needs or an individual planning for retirement, an IPS creates a blueprint or a framework for your investment strategy. It must be the first step taken in order to find suitable investments toward meeting stated investment objectives and should be revised at least annually and updated in response to market conditions.
A primary step in creating an IPS is understanding its overall functionality. First, every IPS consists of both objectives/goals and constraints of investors. Investment objectives must always be looked at in terms of both risk and return. Though it does not get sufficient attention, it is the basics of investing that is critical for every investor to understand.
Risk
Risk tolerance should always be assessed first in order to identify which risks investors are willing to assume. Risk tolerance is a function of an investor's psychological makeup and personal factors such as wealth, age, income and cash reserve. Lastly, risk is directly related to an investor's time horizon, the ability to assume risk and the investor's ability to recover from any temporary investment shortfalls.
Return objectives
Return objectives should always be stated in terms of how an investor will accomplish their stated goals. These return objectives include capital preservation, current income, capital appreciation, and total return. The goal of capital preservation is to prevent loss of an investment's value and produce a return at least equal to inflation, typically a goal for those who need funds in the near future.
A current income goal will have a steady stream of income from interest and dividends. This goal's primary focus is to supplement income to meet planned spending needs. Capital appreciation is the goal to find investments with the intent of having an initial investment increase over time, typically a goal for retirement or for needing the funds in the future. Lastly, total return is a combination of both current income and capital appreciation, an appropriate objective for an investor ...
Retirement planning should be based on an understanding of generating a lifetime income stream. Putnam’s Lifetime Income experience has demonstrated a positive influence on participant savings behavior. The U.S. Department of Labor’s goal of adding lifetime income illustrations on pension benefit statements advances the effort to help retirement plan participants make better savings decisions. Rules governing the distribution of this information should be flexible and open to innovation.
The market for sustainable investments has grown to over $12 trillion in the U.S. and the movement of investable assets into sustainable strategies is expected to accelerate. The update reviews the growth of sustainable investing over the last decade and considers the valuation implications for your RIA.
Similar to 8 Ideas To Help Improve Your DC Plan (20)
Today’s increasingly complex investment and regulatory landscape places greater pressure on the plan sponsors and fiduciaries overseeing defined contribution plans. Fiduciaries are not only re-examining their current investment decision-making practices, they are also seeking to ensure that those practices allow for enough flexibility in implementation to maximize the likelihood of investment success, while protecting the plan sponsor from potential litigation.
Central to the idea of a well-managed program, a clearly articulated investment policy statement (IPS) serves as the foundation of sound governance and a robust oversight process
While many assume the greatest source of retirement plan liability is the plan’s investments, in reality, the vast
majority of lawsuits and regulatory actions involve failures in administration.
If your business is seeking an opportunity for a greater tax deduction and a way to help key employees
maximize benefits, especially over a short period of time, you may want to consider a cash balance plan.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Card
8 Ideas To Help Improve Your DC Plan
1. Russell Investments / Eight ideas to help improve your DC plan / 1
Eight ideas to help
improve your DC plan
Defined contribution (DC) plan sponsors face increasingly complex issues. Russell Investments
has developed a priority list of eight ideas and actions to help plan sponsors guide their
participants toward better decision making as they save for retirement.
Laying the groundwork
1. Ensure adequate savings
Retirement plan participants often do not save enough for
many reasons, including job changes, not taking full
advantage of the employer’s match, or simply a lack of
education about what savings rate is required to sustain one’s
standard of living in retirement. Professional guidance
suggests that participants require retirement contributions of
12%-16% annually over their working careers (from all
sources) to accumulate sufficient assets for retirement.1
However, including both employer and employee
contributions, the average participant’s total contribution rate
is 10.7%2
. which is below what most experts recommend.
Automatic contribution escalation can dramatically increase
total savings by about 200% of final salary,3
but this takes
time. More precisely, it takes seven years to move from an
employee contribution level of 3% to 10% under typical
escalation and default contribution levels, and because the
average participant changes jobs every four years,4
they may
never reach that figure. The effect of job changes alone could
lead to a final accumulation at retirement that is more than
40% less than a full-career employee5
even if each plan has
automatic escalation, which nearly one-third of plans still do
not offer.6
Ensuring optimal savings by employees is critical because
contributions (employer + employee) are the most powerful
and direct determinant of retirement success. Without taking
investments into account, going from 10% to 11% contribution
rate has the potential to improve the retirement outcome by
10%. Retirement income accumulation depends on the
1
Sources: The Real Deal: 2018 Retirement Income Adequacy Study, Aon plc.
Available online at aon.com (16%); Vanguard How America Saves 2020 (12%-
15%)
2
Vanguard How America Saves 2020
3
Assumptions: employer match 50 cents for each dollar contributed by the
participant up to 6% and automatic contribution escalation of 1% per year up
to a 10% cap.
amount of total contributions into the participant’s account, as
well as how much it grows. The expected growth of each
contributed dollar depends on the investment strategy it
follows and how many years of compounding it will
experience.
Ensuring optimal savings by
employees is critical because
contributions are the most powerful
and direct determinant of retirement
success.
Plan sponsors should encourage higher savings rates through
simple steps, such as including an “opt-out” automatic
contribution escalation feature and increasing the escalation
schedule beyond 1% per year. At the very least, contributions
should be escalated to levels that take advantage of the full
employer match. Other tactics are automatic enrollment of
new participants at higher rates or asking participants to
remember their contribution level from a prior employer’s plan.
A contribution re-enrollment, can be a powerful tool to assist
participants in hitting the recommended annual retirement
contribution rate discussed above. See below for more
information on re-enrollments. Plan sponsors can offer
participants online tools that simulate the impact of increasing
their savings rate on future retirement income levels. Finally,
plans should consider implementing a ‘stretch match’ (i.e.
matching a lower percentage of contributions but up to a
higher rate). After all, participants often cite the employer
4
Source: U.S. Bureau of Labor Statistics, Employee Tenure Study, September
2020
5
Assumptions: employer match 50 cents for each dollar contributed by the
participant up to 6% and automatic contribution escalation of 1% per year up
to a 10% cap.
6
Source: Deloitte Defined Contribution Benchmarking Survey 2019
2. Russell Investments / Eight ideas to help improve your DC plan / 2
match as one of the most powerful motivators for setting their
contribution rate.
2. Evaluate the default option
The qualified default investment alternative (QDIA) concept
has been a central element of the corporate defined
contribution scene since it was first introduced in the Pension
Protection Act of 2006. Target date funds, the most commonly
used QDIAs, have received 58% of participant contributions
as of the end of 2018, and that figure is projected to grow to
80% by 2024.7
Significant attention should be paid to whether the current
default option remains suitable for participants or if other
options may better suit their needs. The default solution
choice, and periodic re-evaluation, should be considered a
critical duty of plan sponsors.
There are three primary forms that a QDIA can take (balanced
funds, managed accounts, and target date funds), and each
has its own strengths in different circumstances. For example,
balanced funds are generally the simplest approach;
managed accounts are the most customizable; and target
date funds (age-based options that automatically de-risk over
time) are widely seen as the closest thing available to a “one-
size-fits-all” solution. A hybrid QDIA approach combines these
options and is discussed in the next section. Russell
Investments has demonstrated that with increased
customization, first at the plan level, then at the individual
level, participants are able to provide higher levels of
retirement income adequacy with a higher degree of certainty.
With around 40 target date fund providers in 2020,8
the
marketplace offers many target date default options from
which to choose. While all glide paths assign a higher
allocation to growth assets the further the investors are from
retirement, allocations across providers may differ by as much
as 40% for investors nearing or in retirement. The range of
expected income replacement rates can vary widely among
target date funds, so it is important to consider the overall
objectives of your defined contribution plan when reviewing
the default solution choice.
It is equally important to consider risk in the evaluation
process. Market corrections are unpredictable and high equity
exposures increase the distribution of outcomes. Negative
market returns near the point of retirement have an outsized
impact on sustainability of withdrawals.9
3. Conduct a re-enrollment
Evidence is mounting that the self-directed, do-it-yourself
approach to DC plan investing often results in poorly
constructed participant portfolios and lower-than-optimal
savings rates. Participant inertia, naïve diversification, and a
bias toward the status quo can be attributed to what we
believe is sub-optimal behavior.
7
Source: Cerulli Retirement Markets Report, 2019
8
Morningstar Direct, as of 12/31/20
9
Forecasting represents predictions of market prices and/or volume patterns
utilizing varying analytical data. There is no guarantee that any stated results
will occur.
Fortunately, there is an easy fix. A re-enrollment consisting of
a re-election of investment choices and savings rates can help
participants get back on track to saving adequately and
investing appropriately. A QDIA re-enrollment can help meet
the needs of the majority while still maintaining flexibility for
self-directed members who can opt out at any time. A
contribution re-enrollment, as mentioned previously, follows
the same process only for contribution rates.
While such a process may seem daunting at first, our own
experience has shown that re-enrollments are straight-
forward, with the plan’s recordkeeper doing much of the heavy
lifting10
. With a QDIA re-enrollment, all participants are asked
to re-select their investments, typically through a special
website established by the recordkeeper. If they wish to
maintain their current elections, or select new ones, they can
do so within a certain timeframe, generally about three
months. Communication materials inform participants that if
they fail to act after a reasonable notice period, their existing
plan balance and future contributions will be mapped to the
QDIA on a certain date. Plus, if done correctly (mainly
satisfying certain participant notice requirements), fiduciaries
are provided safe harbor protection under the Pension
Protection Act of 2006. The glide path manager can help
structure both the required and supplemental participant
communications.
4. Streamline the core menu
Russell Investments recommends simplifying core menus
because offering too many investment choices may lead to
participant confusion and place greater fiduciary burdens on
plan sponsors. The average number of investment options is
approximately 19,11
while Russell Investments recommends 6
to 8. Although the average number of plan investments has
decreased over time, many plan sponsors are still offering too
many options. According to Deloitte’s 2019 DC Benchmarking
Survey, only 40% of plan sponsors have simplified the
investment options.
While there is no magic number, decisions about the right
number of investment options should be centered around the
number of investment decisions you wish to ask your
participants to make. The average DC plan core menu
requires plan participants make at least five major investment
decisions: Stocks vs. bonds, capitalization (large vs. small),
investment style (growth vs. value), regional exposure (U.S.
vs. Non-U.S.), and active management (active vs. passive).
Rather than offering narrow investment choices and forcing
participants to become experts on siloed asset classes, we
believe the same amount of diversification can be offered to
participants with a relatively smaller core menu made up of
multiple-managers in each investment option. A multi-
manager approach can help improve the consistency of
excess returns with less volatility than single-manager
portfolios in the same asset class.12
10
Source: Verdeyen, H. (2019 July) “Defined Contribution plan enrollment: A
fiduciary imperative?” Russell Investments
11
Source: PSCA’s 62nd
Annual Survey of Profit Sharing and 301(k) Plans,
2019
12
Source: Russell Investments
3. Russell Investments / Eight ideas to help improve your DC plan / 3
An eye toward the future
5. Develop a framework to evaluate
managed account solutions
As utilization of managed account solutions continues to grow,
plan sponsors and their consultants are developing more
robust frameworks for evaluating different solutions. At
Russell Investments, our framework is straightforward and
objective. Ideally, the following four components should be
carefully assessed:
1. INPUTS: Include capital market assumptions, participant
data, and treatment of asset classes. Not all providers
have robust processes for measurement and treatment of
these inputs, but as the saying goes, "garbage in-
garbage out."
2. OUTPUTS: Include portfolio construction, participant
customization, and the resulting asset allocation that
participants receive. Again, these characteristics can vary
significantly by provider and a robust scoring
methodology on these metrics can help plan sponsors
evaluate the capabilities of each provider.
3. MEASUREMENT OF RESULTS: Include how
participants are informed of their progress toward a
successful retirement, but also how the plan sponsor can
verify that participants are deriving value from the
managed account solution. The U.S. Government
Accountability Office (GAO), in its study of managed
accounts, clearly identified this as a weakness among
current managed account providers.13
We believe that
both plan sponsor and participant reporting should focus
on progress toward a stated retirement goal.
4. FEES: Managed accounts can be expensive, and we
believe that additional fee transparency is needed for
plan sponsors to make an educated decision about
whether to offer managed accounts to participants. Fees
typically include two components: a payment to the
recordkeeper for data transfer, access and/or exclusivity,
and the cost of managing portfolios. Plan sponsors
should understand both components and push for
transparency whenever possible.
6. Bringing it all together
The transition from saving to spending is still clunky for many
participants. Target date funds can serve the accumulation
needs of pre-retirees and help manage account balance
volatility for post-retirees, but participants are largely on their
own when it comes to drawing down the accumulated assets.
Both guaranteed and non-guaranteed products exist to help
participants with their decumulation phase, but the integration
of pre-retirement and post-retirement solutions remains
elusive.
13
Source: U.S. GAO “401(K) Plans: Improvements Can Be Made to Better
Protect Participants in Managed Accounts” June 2014
The solution may lie within managed accounts, which possess
more capabilities to combine pre-retirement accumulation and
post-retirement spending support in one seamless and
integrated solution, essentially taking participants from “cradle
to grave” in a single solution. Because of a participant’s
natural interaction with managed account solutions, the
communication and transition can be a seamless process,
allowing participants to “turn on” retirement spending support
as they near retirement. Managed accounts can solve for
outside assets and automate the process of aggregating all
the participant’s assets pegged for retirement in one place,
whether in-plan or out-of-plan, across all tax treatments, and
can also offer social security claiming strategies as well as tax
efficient drawdown strategies.
The next phase for managed accounts is continuity between
the in-plan and out-of-plan environments. Russell Investments
supports efforts by both regulators and plan sponsors to retain
a greater percentage of participant assets in the qualified plan
environment post-retirement. A greater number of plan
sponsors than ever indicate they want employees to leave
their assets in the plan post-employment. According to one
study, out of more than 200 plan sponsors, a full 50% with
assets of $500 million and above indicated a clear preference
to retain the DC balance of retired employees. Assets
remaining in DC plans after retirement has increased every
year since 2015.14
7. Hybrid QDIA: A natural evolution of
default investing
A hybrid QDIA represents a natural evolution of QDIA
investing, drawing from the strengths of each approach to
serve the differing needs of participants in different life stages.
This approach combines the simplicity of asset allocation
funds (balanced funds and/or TDFs) with the adaptability of
professionally managed accounts when it’s needed most: in
the late-career phase and into retirement.
As mentioned earlier, the default investment is evolving to
adapt to a simple reality: target date funds are constructed
with a ‘typical’ participant in mind, but in reality, there are very
few ‘typical’ participants. Managed accounts help address this
issue by incorporating additional data, such as savings rates,
salary, and outside accounts, and can be useful for those
participants who desire a higher degree of personalization or
14
Source: T. Rowe Price. “What DC plan sponsors prefer retirement
participants do and why it matters”. 2019. Percent of DC assets remaining
in defined contribution (DC) plans 1 year after separating from service.
4. Russell Investments / Eight ideas to help improve your DC plan / 4
who have substantial assets outside the DC plan or DB plan
benefits. While managed accounts can offer benefits like
financial planning guidance to employees, typically, those who
see the most benefit from a managed account are mid to late
career participants, while younger participants are usually
well-served by a target date fund.
A hybrid QDIA offers many aspects of the best of both worlds.
A hybrid QDIA involves a plan sponsor designating more than
one QDIA option for the plan, and defaulting participants into
one of the designated QDIAs depending on their age and
financial circumstances. For example, younger participants
with more homogeneous retirement objectives (primarily
accumulation), may be defaulted into a target date fund or
risk-based fund, while older participants, with more complex
and distinct retirement objectives, may be defaulted into a
managed account. Additionally, defaulted participants are
transitioned to a managed account platform using a rules-
based approach when the participant draws closer to
retirement and their financial situation may become more
complex.
Are managed accounts alone a suitable default option? Yes.
A properly structured managed account solution, we believe,
is potentially the most powerful of the QDIA types in terms of
tying the asset allocation to the participant’s specific goals and
circumstances, and the use of managed accounts has
benefits for participants of all ages. For example, managed
accounts provide personized saving and planning advice, and
appear to be associated with a higher level of engagement
from the plan participant.
8. Defined contribution outsourcing
Many plan fiduciaries struggle to keep up with changing DC
regulatory requirements, fiduciary concerns about compliance
and litigation, and oversight of investment managers,
recordkeepers, trustees and custodians (and the fees they
charge). The traditional approach to managing a DC plan
involves multiple relationships with multiple fees, with the plan
sponsor ultimately responsible for every decision, which can
be a major drain on their limited resources.
In an attempt to simplify, some plan sponsors hire a bundled
provider for investments and plan administration, which from
the outside looks to be a simple approach; however, this often
can be fraught with problems as evidenced by recent class
action lawsuits against plan sponsors. The primary issues
highlighted by recent litigation are excessive fees, revenue
sharing arrangements, choice of share classes in the fund
lineup, and choice of investment vehicle. As a result, we
believe that the traditional model of DC plan management
may no longer be as effective in today’s more challenging
fiduciary environment. For example, many investment
committees still use a quarterly meeting cycle to monitor the
plans and most DC plan oversight committees are spending
too much valuable time managing and monitoring vendors.
This model can lead to slow and onerous decision making.
Most plan sponsors already delegate some plan management
responsibilities, such as legal review and plan administration,
to third parties. This year, consider delegating additional plan
management functions to a third-party expert co-fiduciary.
Delegation allows the investment committee to focus on
higher impact decisions, such as plan design and facilitating
adequate savings behavior by participants, rather than on
administrative functions and vendor management that takes
up valuable committee time and resources. Outsourcing for a
DC plan can take many forms, from limited scope duties such
as investment manager selection and monitoring, to full plan
management, compliance and administration. Remember,
under ERISA it is not necessary for plan sponsors to perform
every fiduciary function themselves, but rather to ensure that
every function is performed according to fiduciary standards.
Exhibit 1: Traditional versus outsourcing model
Traditional DC plan model
Multiple relationships, multiple fees, plan sponsor responsible for everything
DC Fiduciary outsourcing model
Single relationship with clear accountability and direction
5. Russell Investments / Eight ideas to help improve your DC plan / 5
IDEA ACTION
1. Ensure optimal savings Remember previous employer match rate for new employees, increase
default deferral rate, auto-escalate contributions in greater than 1% annual
increments, consider a contribution re-enrollment
2. Evaluate the default Review current QDIA provider and marketplace
3. Conduct a re-enrollment Re-enroll all participants into the plan’s QDIA
4. Streamline the menu Consider reducing the plan’s menu to 6-8 options
5. Framework for managed accounts Consider a hybrid QDIA in conjunction with default option evaluation
6. Harmonize pre-and post-retirement
solutions
Review managed accounts if your plan offers them and maintain ongoing
discussions with your recordkeeper on alternatives
7. Consider hybrid QDIA Stay abreast of emerging products that integrate pre- and post-retirement
solutions for both in-plan and out-of-plan accounts
8. Outsource additional plan
management responsibilities
Consider delegating additional plan management responsibilities to a
qualified provider