DC Pensions Q4 Update

The Continuous Evolution of the DC Landscape

One of the headliners in this list is The DC Future Book, a collaborative report that provides a tremendous amount of data on the defined contribution landscape today. This report was produced in September of this year and takes into account the multitude of effects that COVID-19 has had upon DC plan participants. Perhaps surprisingly, one effect that it has not had upon savers is diminishing their appetite for social bonds and other ESG strategies.

Other papers discuss the various forces at play simultaneously for individuals who are approaching retirement. Can individuals obtain the income security of annuities yet outperform default options such as target date portfolios? How can they determine their optimal savings rate for automatic contributions to retirement plans? To what extent will individual investors need to consider longevity risk and the implications of potentially living a 100-year life? 

The Evolving DC Landscape: The role of OCIOs (PGIM Defined Contribution, 2020)

For compliance reasons, this paper is only accessible in the United States and Canada

OCIO solutions are beginning to become integrated into the plethora of options available to DC retirement plan participants. PGIM provides this report for DC plan sponsors, investment consultants, and OCIO managers that are working towards making these solutions more widely available.

UK DC Pensions: The DC Future Book (PPI, 2020)

For compliance reasons, this paper is only accessible in the United Kingdom

This 77-page report by the Pensions Policy Institute provides a wealth of data on the UK defined contribution pension market, including information about investment allocation trends, contribution levels, and pension pot sizes.

The Role of Active Management in Defined Contribution Plans (MFS, 2020)

Why do defined contribution retirement plans often contain a high degree of passive investments? MFS examines five misconceptions inherent to this decision and makes the case for active allocations instead.

Shifts for the DC Organisation of Tomorrow (Thinking Ahead Institute, 2019)

In this 36 page report, the TAI reveals insights from a study of global DC plans, leading them to a discussion of the transformational changes that will be needed for DC plans and organisations to flourish in the future.

Goal-Based Strategies to Secure Retirement Income (EDHEC-Risk Institute, 2020)

Without investing in costly annuities, how can individuals secure sufficient levels of replacement income in retirement? This detailed report by EDHEC-Risk Institute examines this question and more.

Pension Income: Why drawing down is going up (LGIM, 2020)

For compliance reasons, this paper is NOT accessible in the United States and Canada

This paper contains the results of a five-year study on drawdowns within UK defined contribution plans. The period of examination herein is 2015-2019.

Video: Living for longer (Baillie Gifford, Sep 2020)

This Baillie Gifford roundtable discussion focuses on longevity risk. The authors of a new book, 'The 100-Year Life', contend that in the Western world there is now a 50% chance of living up to the age of 105. But what are the implications of this from a financing and investment perspective?

Improving Retirees’ Withdrawal Symptoms (LGIM, 2020)

For compliance reasons, this paper is NOT accessible in the United States and Canada

LGIM analyses the need for retirees to manage their speed of spending alongside both investment risk (poor performance of investments) and longevity risk (living longer than projected).

Flexicure Solutions for the Pension Crisis (EDHEC-Risk Institute, 2020)

This paper by EDHEC-Risk Institute considers goal-based strategies for those individuals on the cusp of retirement. These strategies can potentially provide both flexibility and income security during the decumulation phase.

Is the Retirement Income Triple Play Possible? (Intech, 2020)

For compliance reasons, this paper is only accessible in the United States and Canada

Could high income-oriented solutions such as defensive equity allocations solve a trilemma of retirement needs simultaneously? This Intech paper examines this question.

Optimal Default Retirement Saving Policies (WPRC, 2020)

What is the optimal savings rate for auto-enrollment retirement plans? The author uses data from OregonSaves, the first auto-enrollment retirement plan that is state-sponsored in the United States.