Successful Defined Contribution Investment Design: How to Align Target-Date, Core, and Income Strategies to the PRICE of Retirement (Wiley Finance) - Hardcover

Schaus, Stacy L.

Hardcover

ISBN 10: 1119298563 ISBN 13: 9781119298564

Publisher: Wiley, 2017

Synopsis

Start-to-finish guidance toward building and implementing a robust DC plan

Successful Defined Contribution Investment Design offers a comprehensive guidebook for fiduciaries tasked with structuring and implementing a 401(k) or other defined contribution (DC) pension plan. More than a collection of the usual piecemeal information, this book seeks to offer a complete, contemporary framework for plan design, together with tested methodologies and analytic techniques to help streamline plan monitoring, management and improve participant outcomes. Examples from plan sponsors provide on-the-ground insight while suggestions from DC consultants add expert perspective. Views from ERISA expert counsel provide additional understanding―along with input from academic thought leaders. Finally, investment evaluation and analysis is joined with participant savings and asset allocation data to look prospectively at potential outcomes, and case studies illustrate real-world implementation of objective-aligned asset allocation such as custom target-date strategies. Though the focus is primarily on U.S. plan design, author perspectives from countries including Australia, the United Kingdom and Canada provide relevant and helpful viewpoints for both new and experienced plan fiduciaries.

For the vast majority of workers, DC plans have replaced traditional defined benefit pension plans as the primary source of employer-provided retirement income. This book provides comprehensive guidance to help you construct a plan to help workers to retire with confidence.

• Adopt a framework for DC evaluation and structure
• Learn new methodologies for investment choice evaluation
• Use the innovative PIMCO Retirement Income Cost Estimate―or PRICE―to help quantify the amount of money a worker needs to create and stay on track to building a real income stream in retirement
• Examine methodologies used at major companies in the U.S. and globally

DC plans are the most rapidly growing retirement market in the world, yet sources of consolidated structural and analytical guidance are lacking. Successful Defined Contribution Investment Design fills the gap with a comprehensive handbook that covers the bases to help you develop an objective-aligned defined contribution plan.

About this title

About the Author

STACY L. SCHAUS is an executive vice president and leads PIMCO’s Defined Contribution Practice working primarily with plan sponsors and consultants. Prior to joining PIMCO in 2006, she was a founder and president of Hewitt Financial Services, which offers DC investment consulting and research as well as brokerage and personal finance services. While at Hewitt, she co-created and launched the Aon Hewitt 401(k) Index^™ to help evaluate how DC participants respond to market changes. She is the founding chair for the Defined Contribution Institutional Investment Association, serves on the executive committee of the Employee Benefit Research Institute, and served as a Financial Planning Association board member. She has 35 years of investment experience and holds an MBA from the Stern School of Business at New York University and an undergraduate degree from the University of California, Santa Barbara.

YING GAO, who carried out the analytic reporting and modeling contained in this volume, is a vice president in the client analytics group in the Newport Beach office of PIMCO. Her primary areas of focus are financial modeling, asset allocation, and risk management. Prior to joining PIMCO in 2009, Dr. Gao worked with the fixed income portfolio management department at Principal Global Investors and the capital markets group at Federal Home Loan Bank of Des Moines. She has 10 years of investment experience and holds a PhD in economics from Iowa State University. She earned her master’s and undergraduate degrees in finance from Zhejiang University in China.

From the Back Cover

Defined contribution (DC) plans represent the fastest growing retirement market in the world, and while plan fiduciaries have many places to turn for advice on structuring DC plans, there hasn’t been an authoritative road map for getting started―until now. Successful Defined Contribution Investment Design gives you the framework, up-to-date information, and analytic tools to build a DC plan to meet the lifetime needs of contributing employees.

Written by one of PIMCO’s chief DC experts and thought leaders, and supported by expert analytics, this comprehensive guidebook looks at the entire investment menu structure in order to walk you through creating an objective-aligned DC plan. Over the last decade, PIMCO has found these plans to be the most successful and reveals why outdated DC strategies are failing specifically because they are misaligned with the objective of the plan, which is to provide participants with a sustainable retirement income. This handbook for real-world practice features dozens of illustrative examples from plan sponsors such as Exelon Corporation, The Boeing Company, and Nestlé USA, and offers privileged commentary from luminary design consultants, including Aon Hewitt Investment Consulting, Callan Associates, Mercer, NEPC, Rocaton Investment Advisors, LLC, and Russell Investments. Insight is also provided throughout from renowned academic thought leaders, including Zvi Bodie, Harry Markowitz, Olivia S. Mitchell, and Richard Thaler. Far-reaching discussions delve into nuanced considerations for plan design, including behavioral finance, increasing life expectancies, and older workers financially unprepared to retire. This peerless resource enables you to:

• Dial in your alignment by calculating the specific dollar amount an employee needs to retire with the innovative PIMCO Retirement Income Cost Estimate (PRICE)
• Gain an in-depth review of the complete range of DC plan investment options, including the pros and cons of each, as well as real costs
• Understand the options for retired plan participants, including whether to stay in or leave a plan, and how to create plans retirees want

Successful Defined Contribution Investment Design empowers you to give your employees a plan they can use to retire with confidence.

All proceeds payable to PIMCO from this book are being donated to the PIMCO Foundation (www.pimco.com/foundation). The Foundation’s mission is to empower people globally to reach their full potential.

From the Inside Flap

Defined contribution (DC) plans represent the fastest growing retirement market in the world, and while plan fiduciaries have many places to turn for advice on structuring DC plans, there hasn't been an authoritative road map for getting started—until now. Successful Defined Contribution Investment Design gives you the framework, up-to-date information, and analytic tools to build a DC plan to meet the lifetime needs of contributing employees.

Written by one of PIMCO's chief DC experts and thought leaders, and supported by expert analytics, this comprehensive guidebook looks at the entire investment menu structure in order to walk you through creating an objective-aligned DC plan. Over the last decade, PIMCO has found these plans to be the most successful and reveals why outdated DC strategies are failing specifically because they are misaligned with the objective of the plan, which is to provide participants with a sustainable retirement income. This handbook for real-world practice features dozens of illustrative examples from plan sponsors such as Exelon Corporation, The Boeing Company, and Nestlé USA, and offers privileged commentary from luminary design consultants, including Aon Hewitt Investment Consulting, Callan Associates, Mercer, NEPC, Rocaton Investment Advisors, LLC, and Russell Investments. Insight is also provided throughout from renowned academic thought leaders, including Zvi Bodie, Harry Markowitz, Olivia S. Mitchell, and Richard Thaler. Far-reaching discussions delve into nuanced considerations for plan design, including behavioral finance, increasing life expectancies, and older workers financially unprepared to retire. This peerless resource enables you to:

• Dial in your alignment by calculating the specific dollar amount an employee needs to retire with the innovative PIMCO Retirement Income Cost Estimate (PRICE)
• Gain an in-depth review of the complete range of DC plan investment options, including the pros and cons of each, as well as real costs
• Understand the options for retired plan participants, including whether to stay in or leave a plan, and how to create plans retirees want

Successful Defined Contribution Investment Design empowers you to give your employees a plan they can use to retire with confidence.

Edition details

• Publisher: Wiley
• Publication date: 2017
• Language: English
• ISBN 10: 1119298563
• ISBN 13: 9781119298564
• Binding: Hardcover
• Edition number: 1
• Number of pages: 384