Getting the Investment Menu Right for DC Plan Participants

通过自动登记、自动升级和自动违约等功能简化决策，使之成为合格的递延投资替代方案（QDIA），有助于固定缴款计划参与者缩小退休储蓄缺口。但如果参与者想要积累足够的资产，以实现退休时的收入替代目标，他们仍然需要帮助实现更好的多元化，克服风险厌恶。

Our recent study of more than 500 sponsors of DC plans with assets of $50 million and above and nearly 300 consultants and advisers, in partnership with Prudential, found that almost half of plan sponsors (47 percent) and more than half of consultants and advisers (55 percent) consider limiting investment options to avoid confusion and overlap to be a very effective means of mitigating participant risk. In interviews, plan sponsors also emphasized the advantages of creating a layered set of investment options that addresses the needs of employees with different levels of financial sophistication. And target date funds (TDFs) meet a clear need: 44 percent of plan sponsors said their participants almost always fail to adjust their investment allocation to reflect their age or years to retirement.

“The investment menu that plan sponsors select has a direct impact on participant behaviors,” says Amy Labanowski, partner and senior investment consultant at Mercer. “We know that most participants really don’t understand the difference between the different investment options. Research also shows that when confronted with too much choice, participants were often confused and make suboptimal investment decisions that can have a significant impact on their retirement readiness. I think that less is better in the case of menu design.”

Distiller Brown-Forman Corp., which sponsors corporate and union plans with a collective $448 million in assets as of July 2016, set out to create a set of investment options that meet the needs of a diverse workforce. “We use a blend of passive and managed funds and TDFs, and that's been just a great way for us to cater to both the sophisticated investor who really can dive into the details and those that don't want anything to do with all of that,” says Donna Wimbec, senior manager of global benefits compliance.

TDFs, especially when situated as the plan's QDIA option, can play a critical role, says Labanowski. “Most participants don’t adjust their asset allocation as their circumstances and risk profile change as they approach retirement, so having a QDIA that automatically changes that mix and also automatically rebalances is key to making people ready for retirement,” she says.

国际纸业认识到，它需要让从高管到工厂的员工都能管理好自己的投资阵容，因此创建了一个三层结构。该公司负责投资的副总裁鲍勃·亨克勒（Bob Hunkeler）解释说， “在我们的一级基金中，我们有三只平衡型基金，风险范围从保守型到激进型。在二级基金中，我们提供11只资产类基金，因此希望建立自己投资组合的参与者可以这样做。我们的三级基金是那些在前两个基金中找不到他们想要的东西的参与者的经纪窗口他们可能想投资个人股票、债券或其他一些基金，比如社会基金，但我们的主要基金阵容中没有提供这些基金。”

TDFs have become a central feature for many plan sponsors attempting to tackle disparities in workforce retirement saving behavior. In our survey, 86 percent said they either currently have TDFs in place or expect to offer them in the next year.

“员工人口当evaluatin至关重要g TDFs,” says Clint Barker, senior vice president of retirement investment solutions at Prudential Investments. “The reason is that every plan is different. You need to consider what are the goals and objectives of the plan and what are the individual saving behaviors of that participant base. For example, is this a plan where employees tend to retire early or unexpectedly, and how does that influence what you do early in the glidepath? Do you want to give them more equity exposure earlier, to give them the opportunity to accumulate, since they don't have the same number of earning years that other people may have? Do you want to have a glidepath that starts to derisk a little bit earlier, because these people are retiring early and you don't want to subject them to a significant market downturn?”

Keeping expenses low is important too. But, says Wimbec, “it doesn't have to be the lowest cost fund. It has to be a reasonable fund.”

在Brown Forman， “我们至少每年都会看一次，在大多数情况下——尤其是当我们考虑更换一只基金或加强某个地方的发行时——我们会更经常地看它。如果它是一个托管账户，你会预计费用会比被动或指数基金高一点——这没关系，只要有这是一个记录，让你相信这是一个合理的费用。我们和我们的投资委员会一起研究。

“Replacing a fund also gets the scrutiny of the employee benefits committee, so there's a two-tier process. We've hired an independent co-fiduciary in that spot. We use a 3(21) adviser to help us vet and help us make sure that we're looking at the full universe. By the time it comes to the investment committee, we're not looking at 40 funds, we're looking at three, and distilling it from there.”

What's generally considered to be the optimal investment menu continues to evolve as the focus of the industry conversation shifts from accumulation to decumulation. A 2014 Prudential Retirement study looked at outcomes based on the plan sponsor’s decision to utilize a default investment option that includes a guaranteed lifetime income solution. It found that participants with lifetime income options were more inclined to stay invested during periods of market turmoil, were better diversified and contributed more to their plan than those without.¹

“I would say the first 20 or 30 years of the 401(k) world was all about accumulating assets for retirement,” says Hunkeler. “The next phase of the 401(k) plan is to address how participants take those assets that they've accumulated and transition to a period where they have to spend down that money.”

人口统计——尤其是美国劳动力中很大一部分的老龄化——是推动计划发起人朝着这一新方向发展的核心因素。

保诚退休集团负责全国企业分销和战略的副总裁迈克尔·多明戈斯说：“显然，在诽谤方面发生了转变，或者更多地是关注焦点。”。“实际上，我们可以感谢婴儿潮一代的朋友们，因为你们确实有这种巨大的财富转移，在退休的那一刻到来并通过它。我们开始看到计划内收入概念的增加。”

¹Prudential Retirement,Guaranteed Lifetime Income and the Importance of Plan Design, 2014.

ABOUT THE SURVEY

This study was developed by Institutional Investor, in partnership with Prudential, to identify the investment risks and behavioral challenges that need to be addressed throughout the retirement planning process and how plan sponsors, advisers and consultants are trying to overcome them.

To support this research, a survey was distributed to Institutional Investor's audience of plan sponsors as well as advisers and consultants between January and February 2016. We received 511 completed survey responses from the plan sponsor audience and 295 completed survey responses from advisers and consultants.

自动注册：An automatic contribution arrangement that can be used as a feature in a retirement plan to allow employers to enroll employees in the company’s plan automatically upon meeting eligibility requirements.

Auto-escalation:A plan design option that allows a plan sponsor to increase participant deferrals annually by a set increment.

RISKS:Investing involves risk. Some investments are riskier than others. The investment return and principal value will fluctuate, and shares, when sold, may be worth more or less than the original cost, and it is possible to lose money. Past performance does not guarantee future results. Asset allocation and diversification do not assure a profit or protect against loss in declining markets.

The target date is the approximate date when investors plan to retire and may begin withdrawing their money. The asset allocation of the target date funds will become more conservative as the target date approaches by lessening the equity exposure and increasing the exposure in fixed income type investments. The principal value of an investment in a target date fund is not guaranteed at any time, including the target date. There is no guarantee that the fund will provide adequate retirement income. A target date fund should not be selected based solely on age or retirement date. Participants should carefully consider the investment objectives, risks, charges, and expenses of any fund before investing. Funds are not guaranteed investments, and the stated asset allocation may be subject to change. It is possible to lose money by investing in securities, including losses near and following retirement.

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