PLANSPONSOR - December 2017/January 2018 - 4

Issue Intro
Closing the Gap
W
e ring in this new year with a cover story,
" A QDIA in Transition " (page 20), that's
noteworthy for many reasons. First, it
indicates that innovation in retirement plan design
continues to evolve. Most in the industry would
agree that automated plan design has been the primary
instrument by which plan sponsors change
the course of participant retirement success-that,
coupled with the ability to default participants into
a well-diversified asset allocation in the form of a
qualified default investment alternative (QDIA).
Now, 10 years since the QDIA's introduction,
INSIGHT ON PLAN DESIGN & INVESTMENT STRATEGY
DECEMBER 2017 - JANUARY 2018 | $29 | WWW.PLANSPONSOR.COM
NQDC Provider Snapshot
Participants
are moved to
a managed
account as
they draw
closer to
retirement
some providers see the opportunity to advance
traditional thinking about the investment option
and its selection, prompting the creation of what some call " hybrid QDIAs " -a combination
of a target-date fund (TDF) and a managed account. Most often this means
defaulting participants into a target-date fund and then automatically switching
them, unless they opt out, from that TDF default to a managed account when they
reach a predetermined trigger.
How do plan sponsors know which participants to target for these hybrid QDIAs,
INAQDIA
TRANSITION
not to mention extract other plan data that might be useful? In " Selective Mining "
(page 42), we review the common types of plan analysis that, in real time, can inform
plan sponsors about the financial health of their participants.
As we begin the year, we also introduce some changes to the magazine, one
being a series about behavioral finance as applied to several demographic groups.
In this issue, we focus on Millennials, specifically those in debt, and more
absorbed with short-term financial goals than with saving in their retirement plan.
In " Future Shock " (page 44), we suggest how you might find solutions for this
employee group.
" Alternative Assets in TDFs " (page 32) and " Active or Passive Strategies " (page 34)
bring readers up to date on investment trends, in defined contribution (DC) plans and
defined benefit (DB) plans. The first story discusses the use of alternative investments
in DC plan menus and their inclusion in TDFs. At the same time, many DB plan sponsors
have shifted assets from active management into passive strategies, due to high
manager fees, underperformance and an inability to monitor the manager efficiently.
Nonqualified deferred compensation (NQDC) plans are often misunderstood.
While generally seen as executive compensation plans, they are meant for more than
just C-suite executives or very highly compensated employees (HCEs). In fact, smallcompany
executives and all types of HCEs also want to fill their savings gap. In " An
Unseen Challenge " (page 26), we discuss the flexibility these plans can offer, plus
present our 2017 PLANSPONSOR NQDC Provider Snapshot.
We hope these stories appreciably fill you in on the latest plan sponsor trends!
Judy Faust Hartnett, Managing Editor
EDITOR-IN-CHIEF: Alison Cooke Mintzer
alison.mintzer@strategic-i.com
CREATIVE DIRECTOR: SooJin Chun Buzelli, svp
soojin.buzelli@strategic-i.com
MANAGING EDITOR: Judy Faust Hartnett
judy.hartnett@strategic-i.com
MANAGING EDITOR, PLANSPONSOR.com:
Rebecca Moore, rebecca.moore@strategic-i.com
EDITORIAL STAFF: Lee Barney, John Manganaro,
Amanda Umpierrez, Karen Wittwer
CONTRIBUTORS: John Keefe, Javier Simon,
Judy Ward
SURVEYS & RESEARCH: Quinn Keeler,
Brian O'Keefe, Jackie Scott
DESIGN & PRODUCTION: Lynn Connelly,
Chris Kwon, Claire Merchlinsky, Tiffany Pai,
Micky Walls
DESIGN CONTRIBUTOR: Cherese Rambaldi
ART CONTRIBUTORS: Julie Benbassat,
Samuel Berenfield, Chris Buzelli, Hye Jin Chung,
Joseph Ciardiello, John Cuneo, Alessandra
De Cristofaro, Sam D'Orazio, Gérard DuBois,
Karen Ko, Lars Leetaru (cover), Suharu Ogawa,
Pete Ryan, Gizem Vural
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PLANSPONSOR - December 2017/January 2018

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