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Keyword: Glide path

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When defined contribution plan sponsors conduct due diligence on target-date fund providers, they’re often considering questions of active versus passively managed funds, the benefits of glide paths that glide to versus through retirement, strategic versus tactical funds and a provider’s approach to environmental, social and governance investing. But according to Sarah Donahue, director of consultant […]

Building a defined contribution pension plan’s investment portfolio should incorporate the benefits and drawbacks of various historical regimes to provide a strong foundation, said Ruthann Pritchard, institutional portfolio manager for global asset allocation at Fidelity Investments, during a session at Benefits Canada‘s 2022 DC Plan Summit. “A robust glide path has to consider all of […]

The selection of a target-date fund glide path is more crucial than ever as the migration from DB to DC pension plans continues. Since its formation in the mid-1990s as an optional alternative to the company’s longstanding defined benefit offerings, the DC plan has amassed more than $1.5 billion in total assets as members gradually […]

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Since target-date funds were introduced to the Canadian market in the early 2000s, they’ve become the dominant investment choice for defined contribution pension plan members. The funds, which are balanced with dynamic asset mixes that adjust as members approach retirement, are offered in a series — typically, one fund for each five-year target retirement band — with each fund […]

Coronavirus prompting CAP sponsors to review TDF suites

My last column, in April, talked about how Canadian target-date fund suites behaved differently during the first quarter of this year, where markets were reacting to the coronavirus crisis. The disparity of year-to-date returns continued in the following months. For some capital accumulation plan sponsors, the behaviour of their plans’ TDFs over recent volatile market […]

Defined contribution plan members are contending with volatile equity markets, ultra-low interest rates and the threat of inflation as the country’s economy begins its tentative recovery. In the first half of 2020, equities took an almost round trip, dropping significantly in the first quarter and recovering to the point that most markets are in neutral or positive […]

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While the Canadian retirement industry has spent a lot of time focusing on the accumulation stage, the decumulation conversation is much further behind. For defined contribution pension plans, almost all jurisdictions across the country have now passed variable benefits legislation, including Ontario, which began allowing the option on Jan. 1, 2020. However, despite receiving legal […]

Fundamental reasons for adding alternatives to DC pension portfolios

There are two fundamental reasons for including alternatives in a defined contribution pension portfolio, according to Ed Studd, solutions manager for U.S. portfolio solutions at Schroders, during a session at Benefits Canada’s 2019 Defined Contribution Investment Forum in Toronto on Sept. 27. First, alternatives can help the portfolio achieve better diversification by accessing different types […]

What options are available for de-risking DB pension plans?

The 2008 financial crisis is an event that defined benefit plan sponsors won’t soon forget. Roller-coaster markets exposed gaps in their investment strategies, while de-risking appeared on pension committee agendas as they assessed the damage and focused on the road to fully funded statuses. Back in 2008, few tools were available to de-risk pension plans. […]

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While many glide paths are based on age, is there a case for adjusting these based on account balance fluctuations or on a plan member’s risk aversion? When it comes to optimal outcomes for members, considering risk aversion may be the most important factor, according to a new paper out of the Australian National University […]