DC Pensions

DC Pensions - Articles & White Papers

DC (defined contribution) pension plans are those where the employee and employer pay a defined % of the employee's salary into a pension pot earmarked enitrely for that employee. DC pensions have grown increasingly popular over the last 20 years, mirroring the unpopularity of DB pensions, which are now universally understood to generate excessive risk and cost for the pension plan sponsor. DC pensions, by contrast, present the sponsor with negligible risk. The risk lies entirely with the employee, who must pay sufficient contributions into his or her individual DC pensions pots to ensure that the fund grows large enough to support them in retirement. In the USA, total AUM within DC pensions is now around 50% of that in DC pensions. This section of the site features articles and white papers covering DC pensions plan issues. A number of high quality research papers, reports and surveys in this section offer insights into different aspects of DC plan design, including the selection of a target-date "glide path" to maximise an employee's chances of retiring with an adequate pension. A key issue with DC pensions is...

employee engagement - the challenge to encourage the workforce to participate appropriately - and a number of papers cover the issues of DC pension participation success, retirement adequacy and the level of retirement savings. The economics of providing 401(k) plans is also considered. Other white papers and articles looks at DC pension plan investment options and the asset classes on offer - should DC pensions trustees and plan sponsors offer target-date funds (TDFs) or ETFs or commercial real estate or hedge funds or liquid alternatives (liquid alts)? Further research considers DC plan governance and how DC retirement plans can be measured against industry benchmarks.

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