Catalogue


Designing successful target-date strategies for defined contribution plans : putting participants on the optimal glide path /
Stacy L. Schaus.
imprint
Hoboken, N.J. : John Wiley & Sons, c2010.
description
xxiv, 307 p. ; 24 cm.
ISBN
9780470596319 (cloth)
format(s)
Book
Holdings
More Details
imprint
Hoboken, N.J. : John Wiley & Sons, c2010.
isbn
9780470596319 (cloth)
catalogue key
7122830
 
Includes bibliographical references and index.
A Look Inside
Excerpts
Flap Copy
Designing Successful Target-Date Strategiesfor Defined Contribution PlansOver the last decade, there has been a revolution in the way that retirement plans have been conceptualized and set up in America. Defined contribution (DC) retirement savings plans have rapidly become many organizations' sole sponsored retirement vehicle, providing participants a primary source of retirement savings beyond Social Security. With the amount of money going into these plans-over $3 trillion in assets-increasingly being invested in target-date retirement strategies, investment managers, consultants, advisors, record keepers, and many others are wisely clamoring to capture these assets and generate other significant business from these game-changing entrants.Taking a closer look at target-date strategies from all angles, Designing Successful Target-Date Strategies'for Defined Contribution Plans provides you with the support you need to design best-in-class target-date strategies for DC plans. Practical and detailed, this thorough book considers the current relevant trends in plan design with coverage of:The expertise of many of the nation's leading consultants, legal experts, plan sponsors, academics, and othersVarious perspectives and innovative approaches to designing optimal DC plansThe history of the development and restructuring of retirement plans in America, especially in light of the Pension Protection Act and recent regulationsWritten by Stacy Schaus, a renowned defined contribution business leader who deals with these issues on a daily basis, this book explains it all, from the evolution of DC plans and design trends, including the development of target-date strategies, to the benefits of building rather than buying an off-the-shelf product, as well as all you need to know to set up your own custom strategies. This nuts-and-bolts book is designed to help you build a successful retirement program that will help manage risk and ultimately foster a dignified and secure financial future for employees of corporations, not-for-profits, governments, and for yourself as well.
Flap Copy
Over the last decade, there has been a revolution in the way that retirement plans have been conceptualized and set up in America. Defined contribution (DC) retirement savings plans have rapidly become many organizations' sole sponsored retirement vehicle, providing participants a primary source of retirement savings beyond Social Security. With the amount of money going into these plans-over $3 trillion in assets-increasingly being invested in target-date retirement strategies, investment managers, consultants, advisors, record keepers, and many others are wisely clamoring to capture these assets and generate other significant business from these game-changing entrants. Taking a closer look at target-date strategies from all angles, Designing Successful Target-Date Strategies for Defined Contribution Plans provides you with the support you need to design best-in-class target-date strategies for DC plans. Practical and detailed, this thorough book considers the current relevant trends in plan design with coverage of: The expertise of many of the nation's leading consultants, legal experts, plan sponsors, academics, and others Various perspectives and innovative approaches to designing optimal DC plans The history of the development and restructuring of retirement plans in America, especially in light of the Pension Protection Act and recent regulations Written by Stacy Schaus, a renowned defined contribution business leader who deals with these issues on a daily basis, this book explains it all, from the evolution of DC plans and design trends, including the development of target-date strategies, to the benefits of building rather than buying an off-the-shelf product, as well as all you need to know to set up your own custom strategies. This nuts-and-bolts book is designed to help you build a successful retirement program that will help manage risk and ultimately foster a dignified and secure financial future for employees of corporations, not-for-profits, governments, and for yourself as well.
Flap Copy
Over the last decade, there has been a revolution in the way that retirement plans have been conceptualized and set up in America. Defined contribution (DC) retirement savings plans have rapidly become many organizations' sole sponsored retirement vehicle, providing participants a primary source of retirement savings beyond Social Security. With the amount of money going into these plans-over $3 trillion in assets-increasingly being invested in target-date retirement strategies, investment managers, consultants, advisors, record keepers, and many others are wisely clamoring to capture these assets and generate other significant business from these game-changing entrants.Taking a closer look at target-date strategies from all angles, Designing Successful Target-Date Strategies for Defined Contribution Plans provides you with the support you need to design best-in-class target-date strategies for DC plans. Practical and detailed, this thorough book considers the current relevant trends in plan design with coverage of:The expertise of many of the nation's leading consultants, legal experts, plan sponsors, academics, and othersVarious perspectives and innovative approaches to designing optimal DC plansThe history of the development and restructuring of retirement plans in America, especially in light of the Pension Protection Act and recent regulationsWritten by Stacy Schaus, a renowned defined contribution business leader who deals with these issues on a daily basis, this book explains it all, from the evolution of DC plans and design trends, including the development of target-date strategies, to the benefits of building rather than buying an off-the-shelf product, as well as all you need to know to set up your own custom strategies. This nuts-and-bolts book is designed to help you build a successful retirement program that will help manage risk and ultimately foster a dignified and secure financial future for employees of corporations, not-for-profits, governments, and for yourself as well.
Flap Copy
Over the last decade, there has been a revolution in the way that retirement plans have been conceptualized and set up in America. Defined contribution (DC) retirement savings plans have rapidly become many organizations' sole sponsored retirement vehicle, providing participants a primary source of retirement savings beyond Social Security. With the amount of money going into these plans-over $3 trillion in assets-increasingly being invested in target-date retirement strategies, investment managers, consultants, advisors, record keepers, and many others are wisely clamoring to capture these assets and generate other significant business from these game-changing entrants.Taking a closer look at target-date strategies from all angles, Designing Successful Target-Date Strategies)for Defined Contribution Plans provides you with the support you need to design best-in-class target-date strategies for DC plans. Practical and detailed, this thorough book considers the current relevant trends in plan design with coverage of:The expertise of many of the nation's leading consultants, legal experts, plan sponsors, academics, and othersVarious perspectives and innovative approaches to designing optimal DC plansThe history of the development and restructuring of retirement plans in America, especially in light of the Pension Protection Act and recent regulationsWritten by Stacy Schaus, a renowned defined contribution business leader who deals with these issues on a daily basis, this book explains it all, from the evolution of DC plans and design trends, including the development of target-date strategies, to the benefits of building rather than buying an off-the-shelf product, as well as all you need to know to set up your own custom strategies. This nuts-and-bolts book is designed to help you build a successful retirement program that will help manage risk and ultimately foster a dignified and secure financial future for employees of corporations, not-for-profits, governments, and for yourself as well.
Reviews
Review Quotes
"...the book is chock-full of interviews with more than 55 experts including consultants, plan executives, academics, financial planners, lawyers and others." ( Pensions & Investments , April 5, 2010)
"...the book is chock-full of interviews with more than 55 experts including consultants, plan executives, academics, financial planners, lawyers and others." (Pensions & Investments, April 5, 2010)
To find out how to look for other reviews, please see our guides to finding book reviews in the Sciences or Social Sciences and Humanities.
Summaries
Back Cover Copy
Your nuts-and-bolts road map to understanding how to create custom target-date strategies One of the hottest investment products of the past few years, target-date retirement funds have taken hold in the world of 401(k) and other defined contribution plans, forcing you, as a plan administrator or sponsor, to rethink your program. Written by one of the nation's most qualified and experienced experts in the field, Designing Successful Target-Date Strategies for Defined Contribution Plans gives you the detailed answers you need to your questions about defined contribution plan design and building custom target-date strategies, with in-depth coverage of: Defined contribution plans in the American retirement system Evolving DC plan design Target-date strategies: packaged versus custom Legal and fiduciary considerations Recordkeeping and trust setup Communication issues Evaluating costs Glide path design Asset classes and alternatives Protecting DC assets Benchmarking Advice and retirement planning Retirement income and guarantees Since target-date strategies place participants on "autopilot," you need to take a good, long look at what you offer so you can confirm that participants will arrive at the right destination. Designing Successful Target-Date Strategies)for Defined Contribution Plans demystifies the often daunting and confusing task of understanding these retirement investments, with sound advice from experts across the industry on the best way to design your own asset allocation, keep plan fees at the lowest possible level, and help protect both plan participants and sponsors from risk.
Back Cover Copy
Your nuts-and-bolts road map to understanding how to create custom target-date strategiesOne of the hottest investment products of the past few years, target-date retirement funds have taken hold in the world of 401(k) and other defined contribution plans, forcing you, as a plan administrator or sponsor, to rethink your program.Written by one of the nation's most qualified and experienced experts in the field, Designing Successful Target-Date Strategies'for Defined Contribution Plans gives you the detailed answers you need to your questions about defined contribution plan design and building custom target-date strategies, with in-depth coverage of:Defined contribution plans in the American retirement systemEvolving DC plan designTarget-date strategies: packaged versus customLegal and fiduciary considerationsRecordkeeping and trust setupCommunication issuesEvaluating costsGlide path designAsset classes and alternativesProtecting DC assetsBenchmarkingAdvice and retirement planningRetirement income and guaranteesSince target-date strategies place participants on "autopilot," you need to take a good, long look at what you offer so you can confirm that participants will arrive at the right destination. Designing Successful Target-Date Strategies'for Defined Contribution Plans demystifies the often daunting and confusing task of understanding these retirement investments, with sound advice from experts across the industry on the best way to design your own asset allocation, keep plan fees at the lowest possible level, and help protect both plan participants and sponsors from risk.Visit www.customtarget.net for video interviews with many of the experts in this book.
Bowker Data Service Summary
This book is particularly valuable, especially in the current challenging financial climate, because it gives in-depth answers to questions about defined contribution (DC) plan design from the nation's most qualified and experienced experts.
Main Description
In the wake of the explosive growth of defined contribution (DC) plans invested with target date strategeies, and the understanding of how important these strategies can be in effectively meeting retirement income goals, plan sponsors are seeking more optimal target date approaches. They need sound advice on the best way to select investment managers, design their own asset allocation, and keep plan fees at the lowest possible level. They don't want "off-the-shelf" products, but a more "open architecture" approach that will enable them to provide target date strategies appropriate for the unique needs of their participants. This book is particularly valuable, especially in this challenging financial climate, becasue it gives in-depth answers to these questions about DC plan design from the nation's most qualified and experienced experts. It presents the views of individuals from all across the market, including a broad range of plan sponsors who work both in the corporate world and in the public/government sectors, consultants and advisors from the most respected firms, academics who teach at leading universities, and other innovative leaders. This broad range of knowledge helps readers to understand the evolution of DC plans, pulls together all angles of what it takes to develop custom target date strategies, and provides them with a look ahead to the future.
Main Description
One of the hottest investment products of the past few years, target-date retirement funds have taken hold in the world of 401(k) and other defined contribution plans, forcing you, as a plan administrator or sponsor, to rethink your program. Written by one of the nation's most qualified and experienced experts in the field, Designing Successful Target-Date Strategies for Defined Contribution Plans gives you the detailed answers you need to your questions about defined contribution plan design and building custom target-date strategies, with in depth coverage of: Defined contribution plans in the American retirement system Evolving DC plan design Target-date strategies: packaged versus custom Legal and fiduciary considerations Recordkeeping and trust setup Communication issues Evaluating costs Glide path design Asset classes and alternatives Protecting DC assets Benchmarking Advice and retirement planning Retirement income and guarantees Since target-date strategies place participants on"autopilot" you need to take a good, long look at what you offer so you can confirm that participants will arrive at the right destination. Designing Successful Target-Date Strategies for Defined Contribution Plans demystifies the often daunting and confusing task of understanding these retirement investments, with sound advice from experts across the industry on the best way to design your own asset allocation, keep plan fees at the lowest possible level, and help protect both plan participants and sponsors from risk. Book jacket.
Main Description
The ultimate guidebook for navigating the new world of pensions and retirement plans In the wake of the explosive growth of defined contribution (DC) plans invested with target date strategies, and the understanding of how important these strategies can be in effectively meeting retirement income goals, plan sponsors are seeking more optimal target date approaches. This timely book provides you with in-depth answers from the nation's most qualified and experienced experts to pressing questions about DC plan design. Presents the views of individuals from all across the market Includes a broad range of plan sponsors both in the corporate world and in the public/government sectors Offers views from consultants and advisors from the most respected firms, academics who teach at leading universities, and other innovative leaders With a broad range of knowledge and insight, Designing Successful Target Date Strategies in Defined Contribution Plans helps you understand the evolution of DC plans, pulls together all angles of what it takes to develop custom target date strategies, and provides you with a look ahead to the future.
Main Description
The ultimate guidebook for navigating the new world of pensions and retirement plansIn the wake of the explosive growth of defined contribution (DC) plans invested with target date strategies, and the understanding of how important these strategies can be in effectively meeting retirement income goals, plan sponsors are seeking more optimal target date approaches. This timely book provides you with in-depth answers from the nation's most qualified and experienced experts to pressing questions about DC plan design. Presents the views of individuals from all across the market Includes a broad range of plan sponsors both in the corporate world and in the public/government sectors Offers views from consultants and advisors from the most respected firms, academics who teach at leading universities, and other innovative leadersWith a broad range of knowledge and insight, Designing Successful Target Date Strategies in Defined Contribution Plans helps you understand the evolution of DC plans, pulls together all angles of what it takes to develop custom target date strategies, and provides you with a look ahead to the future.
Table of Contents
Forewordp. xiii
Introductionp. xv
Acknowledgmentsp. xxi
DC Plan Evolution and Design Trendsp. 1
DC Plans in the American Retirement Systemp. 3
Evolution of DB and DC Plansp. 4
Making the Move from a DB Plan to a DC Planp. 6
How Do We Measure DC, Plan Success?p. 8
What Is a Qualified Default Investment Alternative?p. 10
Is Automatic Enrollment Enough?p. 15
Auto-Escalation: How Much Is Enough?p. 17
How Much Should We Save to Beat Inflation?p. 17
Preparing for Retirement in an Economic Downturnp. 19
What the Future May Hold for DC Plansp. 21
In Closingp. 22
Evolving DC Plan Designp. 23
Investment Structure of Defined Contribution Plansp. 27
Future of DC Plan Investment Designp. 28
Qualified Default Investment Alternatives-Asset-Allocation Strategiesp. 28
Core Investment Offerings in DC Plansp. 30
Brokerage or Mutual Fund Windowp. 36
Passive Investment Strategies?p. 39
Evolving Structures and Alternative Investment Strategiesp. 40
Bringing It All Together: DC Investment Structure and Guaranteesp. 44
In Closingp. 46
Target-Date Strategies: Packaged versus Customp. 47
Why Plan Sponsors Create Custom Target Retirement-Date Strategiesp. 49
Intel: Building Is Better than Buyingp. 56
Verizon: Well Worth the Effortp. 61
In Closingp. 64
Development of Custom Target-Date Retirement Strategiesp. 65
Legal and Fiduciary Considerationsp. 67
Common Legal Questions Regarding DC Plansp. 68
Investment Policy Statements and Governancep. 72
Target-Date Strategies on the Hot Seatp. 74
What May Lie Ahead in Legislation of Target Strategiesp. 79
In Closingp. 83
Record Keeping and Trustp. 84
Two Basic Approaches to Setting Up Record Keepingp. 85
Custom Target Strategies Lead to New Record-Keeping Approachesp. 85
Pros and Cons of Alternative Operational Approachesp. 87
Questions to Pose to Your Record Keeperp. 87
Key Considerations to Determine Which Approach to Choosep. 91
Establishing and Maintaining Operationsp. 92
Conversion of Target Risk to Target Datep. 92
Fee Allocations and Disclosuresp. 92
Rebalancing the Target-Date Strategiesp. 96
Deluxe Corporation: Seamless Operational Setup and Rollout Communicationp. 96
How Record Keepers and Trustees Support Operationsp. 97
In Closingp. 98
Communication Challenges and How to Meet Themp. 100
Common Myths Surrounding Custom Target-Strategy Communicationp. 101
Communicating the Benefits of Target-Date Strategiesp. 102
Communication: Strategies to Keep It Simplep. 103
Communication Toolsp. 105
Helping Plan Participants to Visualize Their Postretirement Futurep. 110
Communications and the Switch to DC Custom Strategiesp. 115
Communication Challenges during an Economic Downturnp. 118
In Closingp. 120
Evaluating Costs m Custom Strategiesp. 121
Why Costs Matterp. 122
Have You Calculated and Reduced Total Plan Cost?p. 122
Keeping Fees Reasonablep. 124
Unbundling Can Keep Down Costsp. 126
Custom Strategies and the Value of Unitizingp. 127
Experts Discuss Fee Transparencyp. 128
ERISA Section 404(c) and Fee Disclosurep. 130
Costs of Implementing and Running Custom Target Strategiesp. 132
In Closingp. 134
Designing and Benchmarking custom Target-Date Strategiesp. 135
Glide-Path Designp. 137
An Academic Look at Creating Optimal Asset-Allocation Strategiesp. 139
A Practitioner's look at Creating Optimal Asset-Allocation Strategiesp. 141
DC Plan Success Requires a New Approachp. 143
Evaluating the Probability of Meeting DC Retirement-Income Goalsp. 144
Evaluating Risk-Factor Exposures in Target-Date Glide Pathsp. 156
Plan Sponsor Approaches to Custom Target-Date Strategiesp. 158
In Closingp. 165
Asset Classes and Alternativesp. 167
Clearing the Decks: Offering a Brokerage Window to Participantsp. 169
Typical DC Core Investment Offeringsp. 170
Simplify, Simplify, Simplifyp. 173
Simplify yet Diversifyp. 174
Suggested Core Investment Lineupp. 176
Adding Alternatives to Target-Date Strategiesp. 191
In Closingp. 194
Helping Protect DC Assets from Riskp. 135
How Do We Experience Risk?p. 196
2008 Market Impact on DC Participant Accountsp. 198
No Place to Hidep. 201
What Are the Main Types of Risk?p. 203
Helping Protect DC Participant Assets from Risksp. 220
Importance of Tail-Risk Hedgingp. 220
In Closingp. 221
Approaches to Benchmarkingp. 223
Introduction to Target Date Benchmarking and the Measure of Successp. 224
Common Approaches to Benchmarking Target-Date Strategiesp. 226
Benchmarking Managed Accountsp. 234
In Closingp. 235
Looking to the Futurep. 237
Financial Education, Advice, and Retirement Planningp. 239
Why Plan Sponsors Provide Education and Advicep. 241
Is Advice Needed When a Plan Has Auto-Enrollment and Target-Date Strategies?p. 241
Education and Advice Offered by Plan Sponsorsp. 242
Evolution from Education to Managed Accountsp. 243
Comparison of Managed Accounts and Custom Target-Date Strategiesp. 246
Advice beyond Asset Allocationp. 247
Advice beyond Advice Modelsp. 248
What Is Financial Planning?p. 249
Financial Planning Processp. 250
Financial Planning Feesp. 251
In Closingp. 254
Retirement Income and Guaranteesp. 256
Encourage Participants to Stay in the Plan or Go?p. 260
In-Plan Guaranteed Income Solutionsp. 276
Plan Sponsors Exploring Guaranteesp. 278
Allowing Consolidation of Outside Assets into the Planp. 280
In Closingp. 281
Conclusionp. 283
Notesp. 287
Indexp. 297
Table of Contents provided by Ingram. All Rights Reserved.

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