DC Plans Slow to Adopt Liquid Alts…But Why?
A recent article on Wealth Management.com titled “Liquid Alts in DC Plans? Don’t Hold Your Breath” discusses the relatively slow adoption of Liquid Alts by defined contribution (DC) Plans relative to what Defined Benefit Plans (DB) have done. The arguments for liquid alts, as the article presents, include managing return and risk management, managing volatility, […]
Use of Liquid Alts Growing in Self-Directed IRAs
A recent article at WealthManagement.com discussed that interest in self-directed IRAs is growing. A few reasons for this are that more people have begun to accumulate sizeable assets in their retirement plans. and are looking to diversify their portfolios beyond stocks, bonds and mutual funds. As such, there tends to be a greater appetite for alternative assets […]
Why have some target date funds recently increased their equity allocation?
Blackrock, Fidelity and Pacific Investment Management Co have increased their equity allocation within their target date funds in the past year. These shifts have consultants, advisors and analysts questioning not only the reasons behind the move, but the potential consequences, especially if the recent market correction would expand. A few excerpts: “The shared characteristic these funds […]
Citigroup 401(k) Plan participants suit allowed to move forward
Suit alleges plan fiduciaries violated ERISA by offering affiliated funds that charged higher fees. A U.S. District Court judge in New York is allowing a participant lawsuit against plan fiduciaries of the Citigroup 401(k) plan. The case is another instance of an affiliated product that charges higher fees than funds with comparable performance. A copy of […]
DC Plans Can Benefit by Adopting DB Plan Best Practices
A presentation by Robert C. Merton at Plan Sponsor Council of America’s 2014 National Conference highlighted several best practices used by defined benefit plans that could be adopted by defined contribution plans to help improve plan outcomes. The two areas of focus were on communication with participants and on investment selection. For example, since […]
A Better Option Than Target Date Funds
An article titled “A Better Option Than Target-Date Funds” written by Prateek Mehrotra, CIO of ETF Model SoTMlutions and Endowment Wealth ManagementTM was recently published in the Industry Voices column on PlanSponsor.com. In the article, Prateek discusses the following drawbacks of TDFs: TDFs assume a “one-size fits all” and fail to take into account unique […]
3 Big Shortcomings of Target Date Funds
Asset growth in Target Date Funds (“TDFs”) in defined contribution plans has been phenomenal the past few years, primarily because the trend in plan design features such as automatic enrollment and being deemed qualified default investment alternatives. Respondents in a Callen Associates survey indicated that the total percentage of defined contribution plan assets in TDFs as of 12/31/2013 was 21.12%, […]
Time to Consider a Collective Trust?
A recent article in PLANADVISER highlights some of the benefits of Collective Trusts. The article, “Time to Consider a Collective Trust?”, John Manganaro provides an overview of Collective Trusts, how they are used, and why they are appealing alternatives to target date or balanced funds. Interest in Collective Investment Trusts (CITs), which are also known as […]
12 common 401(k) compliance errors
According to the IRS, the most common errors in connection with qualified plans, and specifically a 401(k) defined contribution plan, are as follows: Failure to update the required plan document to reflect required mandatory law changes governing 401(k) plans Failure to follow the terms of the plan document in operation, generally as to those common […]
Advisors Improve 401(k) Plan Satisfaction of Small Business Owners
Survey shows small business owners that work with a financial advisor are more satisfied with their 401(k) Plan. A recently published survey of employers regarding their 401(k) Plan offered several insights into the impact that 401(k) Plans have for employers that have between 25 and 250 employees. In summary: Plan Sponsors that work with a […]
