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Successful Defined Contribution Investment Design : How to Align Target-date, Core and Income Strategies
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This book will walk the reader through all steps of building defined contribution (DC) plans such as 401(k)s to help workers retire on time with sufficient retirement income. The authors start off with a thoughtful framework for both evaluating and structuring DC plans. They provide a useful guide to help understand the overall DC investment structure and menu and pull in dozens of plan design examples and insights from plan sponsors such as Intel Corporation, The Boeing Company, and Nestle Corporation. They also share suggestions from DC plan design consultants, including Aon Hewitt, Callan, Mercer, NEPC and Towers Watson.
In addition, they offer methodologies and analytic analyses to guide fiduciaries as they structure plans and evaluate investment choices. For instance, they introduce the PIMCO Retirement Income Cost Estimate (PRICE) as a methodology to quantify both the historical and prospective cost of buying a lifetime income stream – that is, the amount of savings a worker needs to retire with dignity. While the book focuses primarily on U.S. DC plan design, non-U.S. readers will find the framework, case studies, and consultant insights relevant and helpful, as the authors will offer perspective from other markets, including Australia, the United Kingdom, and Canada. Whether the reader is a plan sponsor new to DC plan oversight, a consultant with decades of experience, or an individual keen to learn about plan design, this book will be a valuable resource.