defined contribution

What’s the real point of having a defined contribution (DC) plan in the first place? That’s the big question US plan sponsors needs to ask themselves. If the answer is helping employees achieve better retirement outcomes, then the DC plan can’t just be good: it’s got to be better.

A surprising number of plan sponsors lack a default investment—or choose a default investment for their plan that isn’t a qualified default investment alternative (QDIA). Is confusion part of the problem?

It’s tough for US defined contribution (DC) plans to keep up with regulatory changes if the people responsible for the plans don’t realize they’re responsible. Fiduciary awareness isn’t what it should be. In fact, it’s less than it was several years ago.

With the continuing shift from defined benefit (DB) plans to defined contribution (DC) plans, fewer Americans have the ability to enjoy guaranteed income for life. Now, federal regulators are trying to change that.

At a time when US defined contribution plans are seeking to control risk and enhance returns, hedged global bonds can improve outcomes for participants and sponsors. But how do plans incorporate global bonds in core menus and target-date funds?

Smaller US defined contribution (DC) plans face a host of fee difficulties simply because of the size of their plans. This has led to a growing interest in multiple employer plans as a potential cost-effective solution.

While revenue sharing may be a legitimate way to pay for the costs of operating a plan, both US courts and the Department of Labor (DOL) have made it clear that plan sponsors have a significant responsibility as fiduciaries to fully understand, evaluate and monitor their revenue-sharing arrangements and determine whether they are reasonable. Therefore, the most prudent response for plan sponsors may be to rethink the practice of revenue sharing altogether.

US defined contribution (DC) plan fees have been hit with heavy scrutiny recently—from Department of Labor (DOL) disclosure regulations to a rash of lawsuits that have cost several large plan sponsors millions of dollars in settlements and judgments. But perhaps one of the most interesting fee issues today focuses on revenue sharing.

The vast majority of Americans are saving too little to fund their future retirement needs, and US defined contribution (DC) plans cannot single-handedly make up the difference. The American retirement system is in crisis.

Retirement planning isn’t just long-term investing, it’s long-term spending, too. How can retirees help insulate the nest eggs they’ve accumulated from the corrosive long-term effects of inflation?

For the US and other developed economies right now, it’s “all quiet on the inflation front.” Perhaps too quiet. That’s why we believe it’s time to get real about inflation and the investing opportunities that may well develop in the next several years.

Probably the best way to connect US defined contribution (DC) plan participants with the angst-reducing benefits of managing volatility is through a plan’s qualified default investment alternative (QDIA)—especially if the QDIA is a target-date fund.