revving up the performance of your dc · within your investment fund lineup, what is your top...
TRANSCRIPT
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Revving Up the Performance of Your DC Investment Lineup
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Liana Magner, CFAPartner, U.S. DC & Financial Wellness Leader
Mercer Investments
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Typical Investment Structure
Do it for me Guide me Let me do it
Tier I
Target-Date Options
Tier II
Passive Core Options
Tier III
Active Core Options
Tier IV
Specialty Options
Target-Date Funds
Capital Preservation
Core Fixed Income Index Core Plus Fixed Income
Large Cap Equity Index Large Cap Equity
Small/Mid Cap Equity Index Small/Mid Cap Equity
International Equity Index International Equity
Brokerage Window
(Optional)
For illustrative purposes only.
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Building a successful DC program
LOCATION DEMOGRAPHICS
EMPLOYEE DEMOGRAPHICS
NEEDS
INTERESTS
BEHAVIORS
COMMUNICATION PREFERENCES
10k+PARTICIPANTS
DESIGNING A PROGRAM TAILORED TO PARTICIPANT NEEDS
Average
participant age
44
Median account
balance
$15,000
Note: Sample data for illustrative purposes only
<5 Years
56%
5-10 Years
18%
10-20 Years
17%
20-30 Years
6%
30+ Years
2%
TENURE BREAKDOWN
4 YEARSMEDIAN
TENURE
Capitol
Preservation
18%
Other
2%
Fixed Income
7%
Equity
36%
TDF
38%
TOTAL ASSET ALLOCATION
EQ UI TY
& TDF
FO CUSED
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How many white label investment funds do you offer?
1. None
2. 1-2
3. 3-4
4. 5-6
5. All
THANK YOU TO OUR SPONSOR
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Do you offer custom target-date funds?
1.Yes
2.No
3. I don’t know
THANK YOU TO OUR SPONSOR
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Within your investment fund lineup, what is your top
priority for 2020?
1. Review your target-date fund objectives
2. Evaluate investment fees
3. Simplify your core lineup
4. Evaluate a retirement income tier
5. Review managed accounts
6. Evaluating an ESG option
7. None of the above
8. All of the above
THANK YOU TO OUR SPONSOR
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Kevin A. EdwardsSenior Investment Director
Hartford HealthCare
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Hartford HealthCare
TOTAL DC ASSETS
$1.4B
NUMBER OF
PARTICIPANTS
30,000
ABOUT PLAN:• Consolidated 30 plans down to 3.
• Changed QDIA from asset allocation program to Target-
Date (78% of total). Also still offer core menu and brokerage
window.
• Have auto-enrollment with annual auto-escalation to 6%.
Discussing increase based on SECURE Act expansion.
• Participation, Education and Governance have been critical
areas of focus as system has grown.
• Current discussion on fiduciary responsibility regarding
decumulation.
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Kelly A. BryantDirector, Retirement Plan Investments
UnitedHealth Group
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UnitedHealth Group
TOTAL DC ASSETS
$15.8B
NUMBER OF
PARTICIPANTS
223,000
ABOUT PLAN
Significant plan growth driven by mergers and acquisitions.
“Modernized” investment lineup in August 2019:
• Streamlined number of investment options
• Updated white-label fund names to align with
investment objective
• Negotiated lower investment management fees
• Modified participant website - grouped investment
options by tier structure utilized in communications
• Enhanced investment diversification
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Sue WaltonSenior Vice President, Senior Retirement
Strategist, Retirement Strategy GroupCapital Group | American Funds
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DC Plan Success: Define, Measure, Improve
Saving phase• Healthy contributions
• Good investment results
0%
100%
Contributions
Investment Results
Years before retirementRetirement balance
Transition from contribution to payout
Post-retirement phase • Reasonable payout
• Good investment results
$0
$Bal.
Years in retirement
Retirement
Balance
Without
Earnings
For institutional investors only. Not for use with the public. © 2020 Capital Group. All rights reserved.
For illustrative purposes only. Not intended to portray an actual investment.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
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Revving Up the Performance of Your DC Investment Lineup
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