DC Solutions: Adding Global Bonds to Target-Date Funds

By Alison Martier and Seth J. Masters Within US defined contribution (DC) target-date funds (TDFs), whether we’re considering customized TDFs for larger plans or packaged solutions for smaller plans, our research shows that having a bond allocation that is not US-centric can lead to better outcomes and enhance the effectiveness of the glide path.

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A Guide for Globalizing DC Core Menus

By Alison Martier and Seth J. Masters At a time when plans are seeking to control risk and enhance returns, hedged global bonds can help improve outcomes for US defined contribution (DC) investors. Hedged global bonds have delivered better risk-adjusted results over time than US bonds. So how do we recommend plan sponsors incorporate global bonds, [...]

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In Search of DC Solutions: Are Global Bonds the Answer?

By Alison Martier and Seth J. Masters Many US defined contribution (DC) plan sponsors are seeking solutions aimed at reducing undue volatility—excess volatility without a commensurate increase in return—that can prevent a plan and its participants from achieving their long-term objectives. Our research suggests that hedged global bonds may be one solution.

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DC Plan Sponsors Should Look Further than Their Own Backyard

By Alison Martier and Seth J. Masters US defined contribution (DC) plan sponsors large and small are seeking ways to help plan participants achieve better outcomes. Over the last 30 years, compelling evidence has accumulated that suggests currency-hedged global bonds may be an important part of the solution.

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Safe Harbor Is Safe for Secure Lifetime Income Default Investments

The new frontier in US defined contribution (DC) plans involves qualified default investment alternatives (QDIAs) with a secure lifetime income component. Will such vehicles retain their safe-harbor protections? Yes.

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Fees Matter a Lot, but They’re Not All That Matters

The US Department of Labor’s new fee-disclosure rules for defined contribution (DC) plans will provide participants with much more information on plan and investment-option fees. That’s good. But there’s a real risk that it may unintentionally drive participants toward making poor investment decisions, as my colleagues Mark Fortier and Daniel Notto explain below.

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What Workers Get—and Don’t Get—About Target-Date Funds

Target-date funds have gained strong approval among US defined contribution (DC) plan participants who use them, as I have written before. But results from our seventh annual survey suggest that many US DC plan participants still have some mistaken notions about what target-date funds are…and are not.

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Our View on the Final Participant Advice Rules

In a reversal, the US Department of Labor’s final regulation requires computer-generated investment advice to include target-date funds when comparing the investment offerings provided by a defined contribution plan. But the hurdles to being compliant are high.

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Have Target-Date Funds Lost Their Allure?

A recent article in Pensions & Investments discussed a fund company survey that suggested defined contribution (DC) plan participants aren’t happy with their target-date funds. The survey found that only 22% of participants were “very satisfied” with their target-date investment. The fund company—which isn’t a target-date fund provider—called that “pretty darn low.” But the survey also found [...]

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