Everything we do today can be measured. For instance, I’m able to count the steps I take each day toward my fitness goal. But
more importantly, I can take the time to analyze
the data and realize that I take far fewer weekend
steps than workweek steps and can adjust accordingly. With that said, I have a complicated relationship with these types of personal data tools.
Getting away from the data and doing something simple like reading a non-electronic book
and putting it into our community’s Little Free
Library makes me happy.
For good, and for sometimes maybe not so
good, data is omnipresent. And for plan sponsors in particular, analyzing participant data has become a necessity. Data analytics
and predictive modeling inform employers about how their employee population is
engaging with their benefits, and reveals better ways to tweak retirement and health
plan design. “Harvesting the Right Facts and Figures” (page 26) suggests ways you
can use your analytics’ dashboard.
Target-date funds (TDFs) have one of the highest growth rates among investment products, with $1.6 trillion in assets at the end of the second quarter of this year.
But determining which to include in your plan requires diligence. “Considering TDF
Approaches” (page 32) looks at the issue of strategic vs. tactical asset allocations in
target-date funds. We explain the difference between these allocations plus discuss
how investment managers are using each.
To help plan sponsors get a sense of the TDF marketplace, the 2017
PLANSPONSOR Target-Date Fund Buyer’s Guide offers a market overview, providing
the profiles of more than 80 TDF suites. Plus, we list custom target-date fund
providers, which offer plan sponsors the opportunity to create funds that may better
complement their plan’s demographics or company’s benefits program. Target-date
fund providers submitted detailed information about their products as of June 30;
these products are estimated to account for 99% of the total TDF market by assets.
The leakage of tax-advantaged savings out of the defined contribution (DC)
system has become a focal point across the retirement plan industry and social-policy
sphere, not to mention has greatly reduced retirement security for the plan participants who are affected. According to the National Bureau of Economic Research
(NBER), about 86% of people who leave their job with an outstanding 401(k) plan
loan default on it compared with 10% of all 401(k) borrowers. “Keeping Money in the
Plan” (page 47) suggests several means—both plan design and product-based—by
which plan sponsors can help their employees avoid loan defaults.
Getting back to data analysis, this is a key factor in running a plan. With this
issue we introduce Plan Analysis (page 12), which highlights data and commentary
from sister firm BrightScope. We start this section with analysis of net flows in the
defined contribution plan industry.
Let us know what you think at firstname.lastname@example.org.
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PLANSPONSOR, Vol. 25, Number 4. No part of
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FUND BUYER’S GUIDE
RIGHT THE Facts and Figures
In this age of ‘big data,’
sponsors have the analytic
tools at hand to make
more informed decisions