| Acknowledgments |
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xv | |
| Introduction |
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1 | (8) |
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How This Book Is Organized---and How to Use It |
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3 | (3) |
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A Continuing Commitment to Meet the Need for Information |
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6 | (1) |
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Why Should You Read This Book? |
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7 | (2) |
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PART ONE DC Plans: A Cornerstone of Retirement |
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9 | (118) |
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11 | (24) |
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Preface: A Career and a New Form of Pension Plan Are Born |
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11 | (2) |
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DC Plans: Becoming the New Reality ... No Turning Back |
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13 | (1) |
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Setting Goals for Success: Income Replacement Targets |
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14 | (2) |
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Reducing DC Litigation Risk: Process and Oversight |
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16 | (1) |
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17 | (2) |
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How to Approach Outsourcing DC Plan Resources |
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19 | (1) |
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Hiring an Investment Consultant |
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20 | (1) |
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Getting Started: Setting an Investment Philosophy and Governance Structure |
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20 | (5) |
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PIMCO Principles for DC Plan Success: Building and Preserving Purchasing Power |
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25 | (2) |
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Maximizing DC Savings: Just Do It! |
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27 | (5) |
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32 | (1) |
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Questions for Plan Fiduciaries |
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33 | (2) |
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Chapter 2 Aligning DC Investment Design to Meet the PRICE of Retirement |
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35 | (22) |
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Begin with the End in Mind |
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37 | (2) |
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What Is a Reasonable Pay Replacement Target? |
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39 | (3) |
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Calculating the Income Replacement Rates |
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42 | (2) |
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Historic Cost of Retirement: PRICE Is a Moving Target |
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44 | (3) |
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A Focus on Income, Not Cost |
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47 | (1) |
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PRICE-Aware: Applying PRICE to Consider DC Assets and Target-Date Strategies |
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48 | (2) |
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50 | (4) |
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Tracking DC Account Balance Growth Relative to PRICE |
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54 | (1) |
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Summary: The Importance of Knowing Your PRICE |
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55 | (1) |
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55 | (1) |
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Questions for Plan Fiduciaries |
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56 | (1) |
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56 | (1) |
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Chapter 3 Plan Investment Structure |
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57 | (38) |
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Tiers and Blends: Investment Choices for DC Participants |
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60 | (1) |
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Tier I "Do-It-for-Me" Asset Allocation Investment Strategies |
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61 | (6) |
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Tier II "Help-Me-Do-It" Stand-Alone or "Core" Investment Options |
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67 | (23) |
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Tier III "Do-It-Myself" Mutual-Fund-Only or Full Brokerage Window |
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90 | (1) |
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Considering an Outsourced Chief Investment Officer |
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91 | (2) |
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93 | (1) |
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Questions for Plan Fiduciaries |
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94 | (1) |
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94 | (1) |
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Chapter 4 Target-Date Design and Approaches |
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95 | (32) |
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Target-Date Structures Vary by Plan Size |
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100 | (1) |
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Custom Target-Date Strategies |
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101 | (1) |
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102 | (1) |
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103 | (1) |
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Target-Date Selection and Evaluation Criteria |
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104 | (1) |
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105 | (1) |
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Low Cost and Low Tracking Error Does Not Equal Low Risk |
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106 | (1) |
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Framework for Selecting and Evaluating Target-Date Strategies: Three Active Decisions Plan Sponsors Must Make |
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107 | (1) |
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Active Decision #1 How Much Risk Can Plan Participants Take? |
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108 | (6) |
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Active Decision #2 How Is the Risk Best Allocated across Investment Choices? |
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114 | (5) |
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Active Decision #3 Should Risk Be Actively Hedged? |
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119 | (1) |
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Tail-Risk Hedging Strategies |
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119 | (1) |
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120 | (1) |
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Target-Date Analytics: Glide Path Analyzer (GPA) and Other Tools |
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120 | (1) |
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Global DC Plans: Similar Destinations, Distinctly Different Paths |
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121 | (2) |
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123 | (1) |
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Questions for Plan Fiduciaries |
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124 | (1) |
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125 | (2) |
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PART TWO Building Robust Plans: Core Investment Offerings |
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127 | (138) |
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Chapter 5 Capital Preservation Strategies |
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129 | (26) |
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Capital Preservation: Importance |
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130 | (1) |
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Capital Preservation: What Is Prevalent and What Is Preferred? |
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131 | (1) |
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The $1 NAV: Shared by Stable Value and MMFs |
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132 | (3) |
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Stable Value Offers More Opportunity in a Low-Interest-Rate Environment |
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135 | (3) |
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Looking Forward: The Changing Role of Stable Value |
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138 | (2) |
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Making Low-Risk Decisions: Views from the Field |
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140 | (3) |
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White Labeling: A Capital Preservation Solution |
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143 | (1) |
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An Analytic Evaluation of Capital Preservation Solutions |
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144 | (2) |
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Short-Term, Low-Duration, and Low-Risk Bond Strategies |
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146 | (3) |
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Inclusion of Stable Value in Custom Target-Date or Other Blended Strategies |
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149 | (3) |
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152 | (1) |
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Questions for Plan Fiduciaries |
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152 | (1) |
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153 | (2) |
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Chapter 6 Fixed-Income Strategies |
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155 | (28) |
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What Are Bonds, and Why Are They Important for Retirement Investors? |
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157 | (1) |
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What Are the Different Types of Bonds in the Market? |
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158 | (3) |
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What Types of Bonds Should Be Offered to DC Participants? |
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161 | (4) |
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Investment-Grade and High-Yield Credit |
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165 | (1) |
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Bond Investment Strategies: Passive versus Active Approaches |
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166 | (10) |
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Analytic Evaluation: Comparing Bond Strategies |
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176 | (2) |
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Fixed Income within Target-Date Glide Paths |
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178 | (1) |
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Observations for Fixed Income Allocation within Target-Date Strategies |
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179 | (2) |
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181 | (1) |
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Questions for Plan Fiduciaries |
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181 | (2) |
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Chapter 7 Designing Balanced DC Menus: Considering Equity Options |
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183 | (32) |
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What Are Equities and How Are They Presented in DC Investment Menus? |
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184 | (6) |
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Getting the Most out of Equities |
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190 | (4) |
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Consider Dividend-Paying Stocks |
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194 | (1) |
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Evaluating Equity Strategies |
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194 | (3) |
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Less Is More: Streamlining Equity Choices |
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197 | (1) |
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Shift to Asset-Class Menu May Improve Retirement Outcomes |
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197 | (1) |
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Active versus Passive---The Ongoing Debate |
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197 | (7) |
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Strategic Beta: Consider Adding Fundamentally Weighted Equity Exposure |
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204 | (1) |
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Currency Hedging: An Active Decision |
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205 | (5) |
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Observations for Equity Allocations within Target-Date Strategies |
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210 | (2) |
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212 | (1) |
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Questions for Fiduciaries |
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212 | (1) |
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213 | (2) |
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Chapter 8 Inflation Protection |
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215 | (24) |
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What Is Inflation and How Is It Measured? |
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216 | (1) |
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Why Inflation Protection in DC? |
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217 | (1) |
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History of Inflation: Inflation Spikes Underscore Need for Inflation-Hedging Assets |
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218 | (1) |
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Inflation Protection When Accumulating and Decumulating, and in Different Economic Environments |
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219 | (2) |
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Economic Environments Change Unexpectedly---and Reward or Punish Various Asset Classes |
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221 | (2) |
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Consultants Favor TIPS, Multi-Real-Asset Strategies, REITs, and Commodities |
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223 | (3) |
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How Should Plan Sponsors Address Inflation Risk in DC Portfolios? |
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226 | (2) |
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Implementation Challenges |
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228 | (1) |
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Evaluating Real Asset Strategies |
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229 | (3) |
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Summary Comparison of Individual and Multi-Real-Asset Blends |
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232 | (3) |
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Inflation-Hedging Assets in Target-Date Glide Paths |
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235 | (1) |
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Observations for Inflation-Hedging Assets in Target-Date Glide Paths |
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236 | (2) |
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238 | (1) |
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Questions for Fiduciaries |
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238 | (1) |
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Chapter 9 Additional Strategies and Alternatives: Seeking Diversification and Return |
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239 | (26) |
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What Are Alternative Assets? |
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240 | (2) |
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A Wider Lens on Alternatives |
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242 | (2) |
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Consultant Support for Additional Strategies and Alternatives |
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244 | (3) |
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Back to Basics: Why Consider Alternatives? |
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247 | (5) |
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Liquid Alternatives: Types and Selection Considerations |
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252 | (4) |
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Important Characteristics in Selecting Alternatives: Consultant Views |
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256 | (3) |
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Illiquid Alternatives: Types and Considerations |
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259 | (2) |
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Contrasting Liquid Alternative Strategies with Hedge Fund and Private Equity Investments |
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261 | (2) |
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263 | (1) |
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Questions for Plan Fiduciaries |
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264 | (1) |
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PART THREE Bringing It All Together: Creating Retirement Income |
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265 | (78) |
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Chapter 10 Retirement Income: Considering Options for Plan Sponsors and Retirees |
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267 | (34) |
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Advisor and Consultant Retirement Income Suggestions |
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268 | (4) |
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Why Don't Retirees Leave Their Assets in DC Plans at Retirement? |
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272 | (5) |
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Retaining a Relationship with Your Employer in Retirement: An Innovative and Caring Plan Sponsor |
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277 | (2) |
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Mutual Benefits: Retaining Retiree Assets May Help Both Retirees and Plan Sponsors |
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279 | (1) |
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Turning DC Assets into a Lifetime Paycheck: Evaluating the DC Investment Lineup for Retiree Readiness |
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280 | (5) |
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Evaluating Portfolio Longevity |
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285 | (1) |
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Turning Defined Contribution Assets into a Lifetime Income Stream: How to Evaluate Investment Choices for Retirees |
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286 | (2) |
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Guarding Retiree Assets against a Sudden Market Downturn: Sequencing Risk |
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288 | (1) |
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Ways to Manage Market and Longevity Risk ... without Adding In-Plan Insurance Products |
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289 | (1) |
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Living beyond 100: Planning for Longevity |
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290 | (2) |
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Managing Longevity Risk: Considerations for Buying an Annuity |
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292 | (1) |
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Immediate and Deferred Annuities: Why Out-of-Plan Makes Sense |
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292 | (6) |
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298 | (1) |
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Questions for Plan Fiduciaries |
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298 | (1) |
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299 | (2) |
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301 | (42) |
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DC Plans: Becoming the Dominant Global Model |
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302 | (3) |
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Retirement Plan Coverage and Participation |
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305 | (10) |
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Investment Default and Growth of Target-Date Strategies |
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315 | (4) |
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Retirement Income: The Global Search for Solutions |
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319 | (2) |
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Defined Ambition in the Netherlands |
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321 | (2) |
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New Solutions in Australia and Beyond: Tontines and Group Self-Annuitization |
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323 | (3) |
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"Getting DC Right": Lessons Learned in
Chapters 1 through 10 |
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326 | (7) |
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Analytic Factors to Consider: Summary by Asset Pillar |
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333 | (1) |
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333 | (2) |
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335 | (2) |
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337 | (1) |
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Priority 1 Increasing Plan Coverage and Individual Savings Rates |
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338 | (1) |
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Priority 2 Moving to Objective-Aligned Investment Approaches |
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338 | (3) |
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Priority 3 Broadening Options for Retirement Income |
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341 | (1) |
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Nudging One Another along a Path to Success |
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341 | (2) |
| Index |
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343 | |
Lisainfo e-raamatute kohta