DC Pensions - Articles & White Papers

During the last few years, many U.S. pensions have become fully funded for the first time since 2008. With the widespread adoption of liability driven investing (LDI), bonds now represent a majority of pension assets. With the use of more hedging and less equity risk, pension plan surpluses are likely to persist. This paper…

The financial resources, risk aversions, constraints, and objectives of participants in defined contribution plans are as varied as the people themselves. Because there is no uniform path to financial wellness for such a diverse population, plan sponsors should offer their participants a spectrum of solutions.

Radical reform is required to ensure DC pensioners stay on course to achieve the retirement lifestyle that meets their aspirations. For schemes to support members, the industry will need to raise contribution levels and ensure that savings are managed to deliver the best possible outcomes.

It’s set to be another busy year for DB schemes, sponsors and advisers. Read our 2024 guide to the UK Pensions Landscape for details about pension reforms, sustainability, regulations, pooling and more.

In this edition of the Pension Fund Letter, we continue our discussions on this topic, looking at what it means for different types of pension funds and their KPIs, as well as possible ways of addressing the issue.

There is a seismic shift underway in the UK pensions market. The transition from defined benefit to defined contribution schemes, the introduction of 2015 pension freedoms legislation, and a review of retirement advice all impact the way the industry interacts with savers and retirees.

The S&P Target Date® Scorecard provides performance comparisons and analytics covering the U.S. target date fund (TDF) universe. The S&P Target Date Index Series is a consensus-driven, multi-asset benchmark for TDFs. It is designed to be an accurate representation of TDFs in the U.S. market and to be the basis…

Are “safe” initial withdrawal rates, such as the “4% rule,” still the best guide for retirement spending? Our research offers a fresh perspective on portfolio withdrawal rates by integrating spending flexibility (i.e., dynamic withdrawals) and an outcomes metric that better captures the anticipated retiree sentiment…

We explore asset class coverage gaps in DC core menus and quantify the portfolio implications associated with these gaps.

This paper discusses investment vehicle selection in DC plans, with particular focus on the growing use of collective investment trusts (CITs). It also highlights some of the important decisions plan sponsors should consider when implementing a CIT.

DC plan fiduciaries should take three steps to protect themselves from the high cost of litigation, including obtaining valuable fiduciary liability insurance.

2023 was a year of high inflation and elevated interest rates. This, in turn, brought a lot of volatility in the investment markets, posing challenges for master trusts. In this report, we will delve into how these main trends have shaped the investment landscape and how they have affected the various master trust default…

Long Term Asset Funds (LTAFs) are seen as one of the potential game-changers for bringing private assets into the DC market, addressing challenges such as liquidity management and regulatory compliance, although cost remains a major concern

Defined contribution plan sponsors need to take a disciplined approach to investment menu construction, particularly with reference to participant-directed DC plans.

The long-awaited general code of practice from The Pensions Regulator (TPR) came into force on 28 March 2024. TPR’s revised funding code of practice is expected to be available in June 2024. Some aspects of the new funding regime, for example the definition of significant maturity, will be clarified within the code.

The Conexus Institute’s recently released 2024 edition of its State of Super Research Booklet, provides insights into the state of the Australian super fund sector using data for funds that are regulated by the Australian Prudential Regulation Authority (APRA).

We discuss how investment teams might best contribute to the delivery retirement offerings from the perspective of Australian superannuation funds. Member outcomes are the primary focus in retirement, in contrast with accumulation where portfolio outcomes (i.e. returns) dominate. The role of investments moves from being…

We investigate whether a benchmark and non-constant risk aversion affect the probability density distribution of optimal wealth at retirement. We maximize the expected utility of the ratio of pension wealth at retirement to an inflation-indexed benchmark. Together with a threshold and a lower bound, we are able to generate…

The Taskforce on Social Factors has produced this guide to support pension trustees in assessing the social risks and opportunities of their scheme’s investments.

Now that target-date funds have become the 401(k) option, they no longer need to justify their approaches. Everybody accepts their thesis that employees should invest heavily in stocks when they first begin working, then scale back over the years. The question is not why target-date funds use downward-sloping glide paths; it…