Alternative Innovation in DC Plans

The defined contribution (DC) plan space may not appear to change all that much, but that doesn’t mean there aren’t asset managers thinking about serious innovation. DC plans have evolved into the primary retirement savings plans for most workers in the U.S., so it makes sense that a manger with a laser focus on the retirement market would lead the way.

ICMA-RC is best known for its work with public sector retirement plans with the specific mission to help public employees build retirement security. In support of that mission, ICMA-RC launched a DCIO division that serves both public and private DC plans.

At the moment, ICMA-RC is working through the challenges and solutions of what is something of a holy grail for DC plans – how to incorporate alternatives into the plans so participants can reap the benefits of more institutional-like strategies that are the hallmark of defined benefit (DB) plans. II recently sat down withICMA-RC’s Matt Brenner, Managing Vice President, Investments， 和副总经理克雷格Lombardi President and Head of DCIO, to discuss their pursuit.

Why is there so much interest in adding alternatives to DC plans?

Matt Brenner:从DB计划到DC计划的主要转变是退休储蓄的主要来源。但在这种转变中，可用的投资工具有限。机构领域的DB计划可以获得一整套投资选择。然而，即使DC计划的默认投资（通常是目标日期基金（TDF））在一定程度上反映了DB计划将实现的目标，目前可用的工具也与DB计划可以利用的工具不在同一水平上。这意味着DC计划成员的机会有限。

Our research indicates that in the DB to DC transition there’s a give-up in the return potential for participants, and a different risk structure in a TDF vs. a defined benefit plan.The overwhelming evidence from our researchsuggests that the lack of the availability of alternative investments correlates very highly to those two things.

Are there other ways that DC plan participants are handcuffed as it were?

布伦纳：例如，在时间范围内。DB计划几十年来支付，因此它可以适当地管理流动性，并尝试从各种非智能资产课程中获益。TDF不仅具有日常流动性，而且其潜在的投资是日常液体。由于在DC计划参与者的肩膀上准备退休的义务，他们正在投降他们最有价值的资产 - 他们必须投资的时间。一个20岁甚至是40岁的，他们的投资地平线不是在日期，几个月，季度或甚至几年内衡量的。它在几十年来衡量。他们在直流计划下面的所有资产都是日常液体。这种动态真正带领的计划赞助商和许多人来说，“为什么我们不能访问一些类似的东西，这些东西与人们在他们的直流计划中努力完成的事情相处得很好？他们也有很长的时间。“

Craig Lombardi：在投资经理在直流方面的频谱内，有三个焦点领域推动返回股票，固定收入和现金。现在他们正在寻找Quivivivivive中的另一个箭头，可能提供风险调整的返回，这看起来更像是嵌入在模型组合和/或TDF中的DB计划。这就是兴趣来自的地方 - 他们看到了替代品的风险/退货概况。

因此，迄今为止，无法通过DC计划采用的替代方案？

伦巴第：最重要的是，个人投资者提供的独立替代产品可能会激发犹豫的计划赞助商和顾问。有复杂的监管，操作，私人诉讼和风险障碍，以考虑和克服。However, if you go back to that risk/return profile, when it’s embedded in an overall asset allocation fund and/or TDF, you find investors can reap some of the investment the benefits that a DB plan would by being exposed to alternatives, without having to put all their eggs in one basket.

第二点是，一些老练的投资团队，无论是顾问还是计划发起人，可能没有足够的资源来正确识别这些机会。在这一点上，资产经理可以帮助揭示打包产品中不同类型的另类投资，他们可以使用、信任、看到、挖掘和理解。在这种情况下，计划发起人和顾问不需要整个团队专门对一套备选方案进行尽职调查。他们可以像往常一样，对管理者进行尽职调查。

你在暗示在运营方面的挑战。在DC计划中是否包括ALTS等其他业务挑战？

布伦纳：当然。如果我们谈论的是一个真正的非流动性的替代品，那就需要人们进行分配，他们可能暂时无法摆脱。但即使你能做到这一点，在直接投资的背景下，管理者也会变得更难弄清楚如何准确地分配资本。大多数DC计划参与者每两周储蓄一次，或者每月两次，从他们的薪水中扣除。如果你想作为一个投资者来配置资本，那么考虑到这些流动的性质，这就更具挑战性了。

除了管理流动性、定价和流动如果you’re the investment manager, there are certain regulatory requirements regarding qualified investors that limit a participant’s ability to directly invest in alternatives. Which gets us to the idea of doing something that’s part of a TDF, or some other type of asset allocation product. A single manager who’s managing a TDF may have the resources to do something in-house. But they may not really have the ability to do it effectively within a TDF due to its structure. Also, with a single manager, you can get some diversification in the types of investments, but you don’t have any manager diversification across alternatives. Manager diversification is important given the different types of alternatives available.

It sounds as if when alternatives are available to DC plan participants they will come in the form of a TDF.

布伦纳：我们认为这是可能的步骤，特别是在这种监管环境下，以及我们刚才提到的运营考虑。TDF解决了很多这样的问题，因为它一开始是多样化的，而且你有流入和流出。因此，你对如何在一段时间内分配资本有了更好的认识。此外，TDF的管理者控制着对备选方案的分配，而如果参与者自己控制着分配，那么分析可能发生的事情的经验就少得多。

因此，例如，不同的TDF可以有不同的分配给替代品的百分比或大小？

布伦纳：我想这是对的。

那么，可以说是另一种光和媒介？

布伦纳：Absolutely. There is no single glide path across the target date industry – people have different interpretations as to what a glide path should look like. I anticipate that allocations to alternatives could vary, based on the glide paths and views of different managers. We think that if you’re thinking about an allocation to alternatives you should be mindful of the investment horizon for the investor. In other words, an allocation to a 2040, 2050, or 2060 fund, may be more appropriate than an allocation to a 2020 fund.

伦巴第：我们越来越多地看到大型计划发起人真的在试图解决他们如何使自己的DC计划更像DB计划。因此，人们对定制TDF非常感兴趣，你可以看到他们正在寻找其他类型的投资，以破解代码。所以这是我们正在密切关注的一个领域。

布伦纳：We’re really looking for innovative ways to capture some of that premium on alternatives that has not been readily available. To that point, in many instances when somebody thinks alternatives, the first thing that comes to mind is hedge funds. We do believe that some hedge funds may offer a true illiquidity premium, but many are really not alternatives – they are vehicles that may allow for long-short strategies, or some other type of strategy that occurs entirely in liquid markets. What we’re trying to capture are asset classes’ risk premium that you can’t get to in the same way in liquid markets. That leads us to things like private equity, infrastructure, real estate, and private debt, for example.

The alternatives market is pretty broad, and it’s not just about identifying an investment opportunity. It’s just as much about identifying managers, having access to top tier managers with experience and track records that give confidence for investing in similar types of investments in the future. Those things aren’t necessarily a given with every manager. That’s where a manager’s resources come into play. Once you decide that what you believe is a good investment, you need to get an allocation to that investment. If you can obtain an allocation, that can contribute to a target date fund and to a glide path, and ultimately benefit participants.

Currently, in DC plans and with TDFs, the flow of money is pretty seamless. If alternatives are included, would that flow be disrupted?

布伦纳：TDFS分配给基金资金，并随着时间的推移将分配转换为这些资金。大多数TDF都是共同资金，具有自身的法律，监管和运营要求。包括这种结构类型的替代方案存在真正的挑战，因为有关于流动性考虑的操作和监管限制。

在目标日期基金中有意义的分配，理论上您必须在每个基本资金中包含相同数量的替代品。你可以调整一点点，但理论上它基本上是一样的，而且没有意义。为什么你会在必然是液体固定收益基金的情况下没有出现不足的东西？这是目标日期行业的真正斗争，必须解决。

在任何DC计划中，都有流入和流出，人们都在接受贷款和重新分配。你是怎么适应的？我们相信，你可以管理一个整体的流动性目标日期基金，其中有一个非流动性的组成部分。即使在这种情况下，你也可以通过深思熟虑来解决你的替代品配置的非流动性需求——考虑基本情况和更极端的情况，比如市场震荡时会发生什么。

定价也是一个挑战，是吗？

布伦纳：如果你有可能每天的流量，最终你需要有一个每日计算的资产净值（NAV）为您的目标日期基金。这不是世界上最容易的事，但也不是不可能。

Everything I just mentioned is a challenge, but we don’t think it’s impossible. It requires a lot of work, but it is very much possible to arrive at daily valuations that ultimately translate into a NAV that can be traded on a daily basis.

伦巴第：我们相信我们可以找到一种方法来基于将在投资组合本身内的分配来敏感的优势。如果将2035年基金与2055个基金进行比较，您将与替代方案进行不同的分配。但由于投资组合中的其他一切，它将保持敏感。Overall, you’ll still have cash positions, you’ll still have fixed income, and you have other areas to source any liquidity needs, but as in DB plans, you’ll be able to remain fully invested to get that risk return benefit over time.

布伦纳：我们认为，在包括替代方案的精心结构化的TDF中，有几个杠杆，即使在大幅下降的情况下，也允许您成功管理流动性问题。如果适当的结构，您应该灵活地通过压倒性液体的投资组合产生流动性。您还可以在思考某些方面展开的方式建立保障措施 - 因此有办法解决和缓解流动性问题。

Learn more about the potential for alternatives in DC plans – and more overall on creating more effective DC plans.

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Disclosure:

此信息仅供机构使用。

This is not intended as a solicitation nor does it constitute investment advice. The asset class discussions included herein are not meant to be exhaustive. Vantagepoint Investment Advisers, LLC (VIA) and its affiliates are not responsible for any investment action taken as a result of this piece. Investors should carefully consider their own investment goals, risk tolerance, and liquidity needs before making an investment decision. Investing involves risk, including possible loss of the amount invested.

Investment advisory services are made available to institutional clients through VIA, an SEC registered investment adviser and wholly-owned subsidiary of ICMA-RC. For more information, please see VIA’s Form ADV, available atwww.adviserinfo.sec.gov. 当基金由我们的仅限固定缴款投资（DCIO）团队向机构客户进行营销时，基金由ICMA-RC Services，LLC（RC Services）提供，后者是一家在SEC注册的经纪交易商和FINRA成员公司。RC Services是ICMA-RC的全资子公司，也是VIA的附属公司。

提供的信息已从被视为可靠的来源获得，但不保证。过去的表现并不能保证将来的结果。