Description: The article describes the factors that should determine the asset allocation of an employer's QDIA, especially Target Date Funds, and suggests that in general QDIAs have insufficient equity in retirement asset allocations.

Description: First in a series of articles for Retirement Section News focusing on Defined Contribution issues

Description: Defined benefit plans have been disappearing from the private sector retirement program landscape. 401k Plans that have taken their place are not designed to provide retiree lifetime income. Individuals seldom work for a single employer and thus have many retirement accounts spread about. This commentary discusses an alternative approach to providing retirement income a voluntary basis in a vehicle that is decoupled from employers.

Description: This article offers insights about the United Technologies Corporation lifetime income approach and information on the design, administration and acceptance.

Description: The SECURE Act of 2019 requires an annual disclosure to participants in defined contribution plans. The intention is to help participants understand the relationship between their account balances and the estimated retirement income—that might be provided from those balances. But the disclosure requirements lack the features needed to provide meaningful information to many participants, which can be misleading if not well understood. Consequently, this provides an opportunity for actuaries to work with retirement plan sponsors to improve the disclosures.

Description: Article presents a potential role for pension actuaries to help assess the effectiveness of defined contribution plans.

Description: Interview with Blaine Aiken to learn about recent developments in fiduciary responsibility and financial and retirement advice. New developments will extend the fiduciary requirements financial advisors are subject to. These developments are linked to changes in the code of ethics that apply to CFPs.

Description: A DC plan design information that could align with organizational goals allowing for benefits for both higher and lower paid employees. It works amazingly easy for 403(b) plans but can also work well with 401(k) plans. You can model the design to see what works best for your organization to ensure passage of nondiscrimination tests and alignment with budget.

Description: Many retirement actuaries have experience developing, implementing, and monitoring Liability Driven Investing (LDI) strategies for plan sponsors. These strategies typically involve modifying a plan’s investment strategy to remove a significant portion of the investment and interest rate risk now or at some point in the future when specific triggers are met. The tactics often involve the use of fixed income assets to cash flow and/or duration match the liabilities. In the spirit of helping actuaries expand their roles in an evolving defined contribution world, this article explores the application of LDI and derisking strategies within defined contribution and individual retirement accounts. The economic theory behind this approach is called the lifecycle hypothesis, or lifecycle finance. The benefits of the lifecycle finance method are that it provides a safe approach to save for retirement and a secure source of floor income during retirement. Similar to pension plans, each individual has his or her own idiosyncratic needs, wants, and risks that should be considered. Actuaries are uniquely situated to help defined contribution plan sponsors, individuals, and even themselves implement the lifecycle finance approach by developing and distributing tools and methods that focus on income (rather than wealth), LDI strategies, and personalization.