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 […]
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 […]
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. […]
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 […]
There are major differences between what defined contribution plan sponsors are trying to communicate to members and what members hear, according to a new study by Invesco. “We believe a disconnect remains between what plan sponsors say and what participants hear,” said John Galateria, managing director and head of North America institutionals at Invesco, in a press […]
Ensuring a glide path’s asset allocation is correct is really important since it’s going to be managing the bulk of positions for so many defined contribution plan members, according to Ruthann Pritchard, speaking at the 2018 Defined Contribution Investment Forum in Toronto in September. While the level of equity within the glide path at any given moment […]
The use of target-date funds is on the rise in Canada, with more members of capital accumulation plans being offered the investment option every year. Half of plan sponsors with defined contribution plans (50 per cent) and group registered retirement savings plans (51 per cent) allocated target-date funds as their default option in 2016, according […]
Target date products (funds or automated portfolios) automatically reduce the exposure to equity and other risky assets of a DC member’s invested savings as he/she approaches retirement. But is this reduction in risk good for everyone?