Retirement income adequacy should be the primary objective of most DC plans today.
(PRWEB) May 14, 2015
In its newly released white paper “Defined Contribution Plan Success Factors: Framework for Plans with an Objective of Retirement Income Adequacy”, DCIIA outlines specific recommendations to improve retirement outcomes for defined contribution participants.
There are more than 630,000 employer-sponsored defined contribution (DC) plans in place in the US to help nearly 90 million participants prepare for retirement. How successful will these plans be? Traditional measures of success include factors based on a plan’s inputs, such as participation rates, savings levels, and the performance of investment options relative to selected benchmarks. These metrics do not, however, accurately capture a plan’s potential to provide its participants with retirement income adequacy: helping plan participants build sufficient savings to achieve their goals while working to support their income needs in retirement. Lew Minsky, Executive Director of The Defined Contribution Institutional Investment Association (DCIIA), commented, “Retirement income adequacy should be the primary objective of most DC plans today.”
DCIIA has developed this best practices framework to outline actions that plan sponsors and fiduciaries can take to build plans that have the greatest potential to help participants achieve retirement readiness. It specifically addresses factors related to Plan Design, Investment Structure, and Plan Monitoring. It can help plan sponsors and fiduciaries evaluate existing plans; develop thoughtfully designed plans; maximize the effectiveness of auto features programs; and identify and address suboptimal plan participant behaviors.
The Defined Contribution Institutional Investment Association (DCIIA) is a nonprofit association dedicated to enhancing the retirement security of American workers. Toward this end, DCIIA fosters a dialogue among the leaders of the defined contribution community who are passionate about improving defined contribution outcomes. DCIIA members include investment managers, consultants, law firms, record keepers, insurance companies, plan sponsors and others committed to the best interests of plan participants. For more information, visit: http://www.dciia.org.