SSgA's presentation on "Changing the face of retirement" at the PensionSource Fund Manager Conference 2012


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SSgA's presentation on "Changing the face of retirement" at the PensionSource Fund Manager Conference 2012

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SSgA's presentation on "Changing the face of retirement" at the PensionSource Fund Manager Conference 2012

  1. 1. DC Schemes - Evolving with the times John Campion State Street Global Advisors 28th November 2012IREPRS-0031 The information contained in this document is current as of the date presented unless otherwise noted.
  2. 2. SSgA — A Trusted Partner Active, enhanced, fundamental, passive, pure alpha and multi-asset class solution €1.6 Trillion1 in Assets Under Management* All Other2 €98.0 B 100 90 Cash4 80 €298.2 B Equity €604.9 B 70 60 50 40 53% 84% ETFs1 30 €261.6 B 20 10 Fixed Income Solutions (ISG)3 €243.3 B 0 SSgA clients Percentage of new €100.1B with two or business from existing more strategies* SSgA clients* *As of September 30, 2012 1 This AUM includes the assets of the SPDR Gold Trust (approx. €58.6billion as of September 30, 2012), for which State Street Global Markets, LLC, an affiliate of State Street Global Advisors, serves as the marketing agent. 2 Includes Absolute Return, Commodities, Currency, Company Stock, Global Multi Strategy, Hedge Fund of Funds, Managed Futures, Private Equity and Real Estate 3 Assets in Solutions are not counted in the underlying asset class 4 Includes securities lending collateral, cash, and money market 2GLSTND-0521
  3. 3. SSgA’s Global Knowledge – DC Trend WatchDC-0248
  4. 4. Structure Trend Watch: • Interest in income solutions is high, but implementation still low. 11% of plan sponsors currently offer an in-plan guaranteed income option. 5 • Inflation is another area for action; TIPS are in 86% of TDF’s, US REITs are in 53% of TDF’s, and Commodities are in Investments1 47% of TDF’s.6 • The use of Custom Target Date 44% 40% 85% 83% 13% funds rose from 8.9% in 2008 to an anticipated 13.2% in 2012 Use Use a due to better cost structure and Separate Do not Use of access to best-in-class Collective Accounts mix of have an custom investment managers. 1 Trusts active income/ target and annuity date1 2012 DC Trends Survey, Callan Investment Institute2 Deloitte passive solution funds 2011 Annual 401(k) Benchmarking Survey3 Large-cap Funds Dominate DC index Landscape –, June 20, 20114 DC Observer, Callan Institute , First Quarter 20125 BlackRock Annual Retirement Survey, 20126 Callan 2012 DC Observer 4
  5. 5. Aspects of 401(k) Plan Design Trend Watch: Many plan sponsors indicate Employee contributions — Slightly decreasing they will be revisiting their default savings rates and match programs in order to facilitate higher savings rates and to improve retirement readiness.1 Default rates — Neutral Auto-enrollment — Increasing 2 Auto-escalation — Neutral 1 SSgAClient Listening Campaign completed end of 2010 2 SSgA Participant Magazine Summer/Fall 2012 5DC-0480
  6. 6. Corporate DC Plan Trends Investment selection trends 1 2002 2010 Trend Watch: 41.2% 42.8% Equity • Recent research shows that workplace financial education 12.0 11.5 programs improve employee loyalty GIC/Stable Value plus help employers contain costs 9.0 9.0 and maximize the return on Bond investment of their benefits programs.2 16.5 8.0 Company Stock 1.1 9.9 Lifestyling - Target Date 0.5 4.7 - Target Risk 6.5 3.5 Cash/Money Market 2.5 2.9 Self Directed 10.5 7.7 Balanced 1 Workplace Education can Help Employees Address Money Challenges and Create a Sense of ‘Financial Wellness’, by Jack Egan, 2011 2 Cerulli Quantitative Update – Retirement Markets 2011 6DC-0480
  7. 7. Participant Engagement and Communication Trend Watch: “Participants are hungry for help.” 2 • There is slow adoption of social networking • Top 2012 communication themes for plan (Facebook/Twitter) by many sponsors include:1 plan sponsors, but some are beginning to use these – Investing (e.g. market activity, use of funds, technologies to engage employees with a focus diversification, market timing) on education and tips for – Plan Participation savings. Communicating investment details remains as – Contribution levels part of traditional communication vehicles. – Retirement Income Adequacy • Action-directed communication – Fees (quick enrollment cards, one- click emails) are also increasing in popularity as plan sponsors learn to drive action • Only 9% of participants would describe themselves as with communication. being “extremely educated” in financial matters and slightly more than a third consider themselves as “fairly knowledgeable.” 2 1 Callan 2012 Defined Contribution Trends Survey 2 SSgA The Participant Magazine, Winter/Spring 2012 7DC-0480
  8. 8. Participant Engagement and CommunicationSurvey participants were asked to describe which of the followingwould be helpful in encouraging them to save and invest forretirement:2 35% 94% 62% 74% 84% 93% Receiving Having Getting Automatically Showing me Giving me aInformation making me do how people computer small steps Constant something, scares me like me are tool that will that are Reminders but letting me opt out or successful guide me easy to make a with savings through the accomplish different and choices decision investments2 SSgA The Participant Magazine, Winter/Spring 2012 8
  9. 9. Important Disclaimer The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSgAs express written consent. This material is solely for the private use of SSgA clients and is not intended for public dissemination. State Street Global Advisors Ireland Limited is regulated by the Central Bank of Ireland. Incorporated and registered in Ireland at Two Park Place, Upper Hatch Street, Dublin 2. Registered number 145221. Member of the Irish Association of Investment Managers. The value of investments can fall as well as rise. Past performance may not be a reliable guide to future performance. All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such. Investing involves risk including the risk of loss of principal. © 2012 State Street Corporation – All Rights Reserved The views expressed in this material are the views of the SSgA Defined Contribution team through the period ended September 14, 2012 and are subject to change based on market and other conditions. The information provided does not constitute investment advice and it should not be relied on as such. All material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Past performance is not a guarantee of future results. The MSCI indexes are the exclusive property of MSCI Inc. (“MSCI”). MSCI and the MSCI index names are service mark(s) of MSCI or its affiliates and have been licensed for use for certain purposes by SSgA. The financial securities referred to herein are not sponsored, endorsed, or promoted by MSCI, and MSCI bears no liability with respect to any such financial securities. The [Prospectus] contains a more detailed description of the limited relationship MSCI has with SSgA and any related financial securities. No purchaser, seller or holder of this product, or any other person or entity, should use or refer to any MSCI trade name, trademark or service mark to sponsor, endorse, market or promote this product without first contacting MSCI to determine whether MSCI’s permission is required. Under no circumstances may any person or entity claim any affiliation with MSCI without the prior written permission of MSCI. Source: Barclays Capital POINT/Global Family of Indices. ©2011 Barclays Capital Inc. Used with permission. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell Indexes are a trademark of Russell Investment Group. The Dow Jones Indexes are a product of Dow Jones Indexes, the marketing name and a licensed trademark of CME Group Index Services LLC ("CME Indexes"). "Dow Jones®" and "Dow Jones Indexes" are service marks of Dow Jones Trademark Holdings, LLC ("Dow Jones"), have been licensed to CME Indexes and sublicensed for use for certain purposes by State Street Global Advisors. Investment products based on Dow Jones Indexes are not sponsored, endorsed, sold or promoted by CME Indexes, Dow Jones or their respective affiliates, and CME Indexes, Dow Jones and their respective affiliates make no representation regarding the advisability of trading in such products. Standard & Poors (S&P) Indexes are a registered trademark of Standard & Poors Financial Services LLC. AR = IREPRS-0428 9DC-0480