Retirement

Defining and discovering "alpha" in participated-directed defined contribution retirement plans is perhaps the most difficult and important discussion in the industry today. Alpha in DC plans is very different than what asset managers pursue when they strive to beat their benchmarks, which is the hallmark of their abilities and ultimately defines their success. Alpha in DC plans is a measure of participants' success in replacing income within the plan.

With the uncertainty of today's market, guaranteed lifetime income options, or GLIOs, are emerging as a promising new way to help retiring employees protect their retirement income streams over a longer time horizon. EBA recently spoke with Ben Yahr, an actuarial adviser and part of Ernst & Young's Insurance and Actuarial Advisory Services practice, to find out more about GLIOs.

Retirement planning is an important issue, but according to a PricewaterhouseCoopers study, many workers remain more concerned about making ends meet.

In my last article, I discussed the benefits of reviewing your plan document with the goal of simplifying it ("ERISA and KISS: Strange bedfellows or a marriage made in heaven?" from EBN May). But even if you haven't simplified your plan document, you can begin using the tenet of simplicity for communications to your participants.

"Past performance is not necessarily indicative of future results." Just nine words that have been repeated enough in mutual fund marketing materials for investors to tune out their message or, perhaps, they have chosen to ignore the most important of those nine words, the word "NOT."

More workers are delaying retirement, according to The Conference Board.

Cash balance plans are becoming increasingly popular with small businesses as well as Fortune 500 companies, says Dan Kravitz, president and CEO of Kravitz, Inc., an independent firm of retirement consultants headquartered in Southern California.

Continuing a comeback after a difficult 2010, annuity sales through banks topped $4 billion in March to reach their highest level since exactly two years earlier, according to research firm Kehrer-LIMRA.

Despite the widely held belief that younger investors have become tremendously risk-averse due to the economic crisis, Vanguard is finding that younger investors have increased their equity exposure considerably.

Although annuities are getting more attention as a way to guarantee income in the wake of the 2008 market crash, clients aren't keen on the price that they have to pay, and advisers don't like the costly fees and commissions.