PLANSPONSOR - October/November 2021 - 34

PLAN BENCHMARKING | INVESTMENT STRATEGIES
The Evergreen Discussion
Still no winner when it comes to passively vs. actively managed funds
F
or years, plan fiduciaries have
debated whether actively managed
funds or passively managed funds
are more appropriate in defined contribution
(DC) plans. Numerous excessive fee
lawsuits against retirement plan sponsors
have been pushing the needle toward the
use of passive funds on DC plan investment
menus. With that said, there are
several things to consider.
As a threshold matter, says Brian
Tiemann, a partner in the employee benefits
and executive compensation group,
McDermott Will & Emery in Chicago,
plan fiduciaries have a duty of care when
selecting investments. " They must play
the role of a prudent expert, with the lens
of someone knowledgeable about plan
investments. "
When choosing between an actively
managed fund and a passively managed
fund, fees are important, but fiduciaries
also need to look at historical returns,
Tiemann says. Passive funds tend to
track a benchmark closely, while actively
managed funds seek to outperform the
benchmark, he says, so higher returns
could offset the additional fees charged
for an actively managed fund.
" Keep in mind, considering active
funds versus passive funds is not necessarily
an apples-to-apples comparison, "
he says. " Historical and projected returns
may be different, and it's important to
take into account returns net of fees to
consider the potential for success of the
investment. "
Investment Cost and Fees
Proponents of using passive funds in DC
plans argue that actively managed funds
cost more, and they point to research
showing that these funds in general fail to
outperform their benchmarks. S&P Dow
Jones Indices' most recent " SPVIA [S&P
34 PLANSPONSOR.COM October - November 2021 Art by Jonathon Rosen
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PLANSPONSOR - October/November 2021

Table of Contents for the Digital Edition of PLANSPONSOR - October/November 2021

INSIGHTS
INDUSTRY ANALYSIS
RULES & REGULATIONS
UPFRONT
To Attract and Retain
2021 DC Plan Benchmarking Survey
Investment Appraisal
The Evergreen Discussion
Retirement, by Auto-Pilot
FIDUCIARY FORUM A Useful Gauge
INSIDE ANGLE ESG for Fiduciaries
PLAN PROFILE Picture of Health
PLANSPONSOR - October/November 2021 - Cover1
PLANSPONSOR - October/November 2021 - Cover2
PLANSPONSOR - October/November 2021 - 1
PLANSPONSOR - October/November 2021 - 2
PLANSPONSOR - October/November 2021 - 3
PLANSPONSOR - October/November 2021 - INSIGHTS
PLANSPONSOR - October/November 2021 - 5
PLANSPONSOR - October/November 2021 - INDUSTRY ANALYSIS
PLANSPONSOR - October/November 2021 - 7
PLANSPONSOR - October/November 2021 - RULES & REGULATIONS
PLANSPONSOR - October/November 2021 - 9
PLANSPONSOR - October/November 2021 - 10
PLANSPONSOR - October/November 2021 - 11
PLANSPONSOR - October/November 2021 - UPFRONT
PLANSPONSOR - October/November 2021 - 13
PLANSPONSOR - October/November 2021 - 14
PLANSPONSOR - October/November 2021 - 15
PLANSPONSOR - October/November 2021 - 16
PLANSPONSOR - October/November 2021 - 17
PLANSPONSOR - October/November 2021 - To Attract and Retain
PLANSPONSOR - October/November 2021 - 19
PLANSPONSOR - October/November 2021 - 20
PLANSPONSOR - October/November 2021 - 21
PLANSPONSOR - October/November 2021 - 2021 DC Plan Benchmarking Survey
PLANSPONSOR - October/November 2021 - 23
PLANSPONSOR - October/November 2021 - 24
PLANSPONSOR - October/November 2021 - 25
PLANSPONSOR - October/November 2021 - 26
PLANSPONSOR - October/November 2021 - 27
PLANSPONSOR - October/November 2021 - 28
PLANSPONSOR - October/November 2021 - 29
PLANSPONSOR - October/November 2021 - Investment Appraisal
PLANSPONSOR - October/November 2021 - 31
PLANSPONSOR - October/November 2021 - 32
PLANSPONSOR - October/November 2021 - 33
PLANSPONSOR - October/November 2021 - The Evergreen Discussion
PLANSPONSOR - October/November 2021 - 35
PLANSPONSOR - October/November 2021 - Retirement, by Auto-Pilot
PLANSPONSOR - October/November 2021 - 37
PLANSPONSOR - October/November 2021 - FIDUCIARY FORUM A Useful Gauge
PLANSPONSOR - October/November 2021 - INSIDE ANGLE ESG for Fiduciaries
PLANSPONSOR - October/November 2021 - PLAN PROFILE Picture of Health
PLANSPONSOR - October/November 2021 - Cover3
PLANSPONSOR - October/November 2021 - Cover4
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