Skip to main content
PGIM LogoPGIM Logo
    • Megatrends
    • Annual Best Ideas
    • Quarterly Market Outlooks
    • Market Events
    • Thought Leadership
    • Events & Webinars
    • ESG Investing
    • Investing in Alternatives
    • Reaching for Yield
    • Clients We Serve
    • Defined Contribution
    • Institutional Relationships
    • Advisory Solutions
    • Global Locations
    • Contact Us
    • Overview
    • Leadership
    • History
    • Inclusion & Diversity
    • Global Locations
    • Jennison Associates
    • PGIM Fixed Income
    • PGIM Private Capital
    • PGIM Real Estate
    • QMA
    • PGIM Investments
    • PGIM Global Partners
    • Contact Us
    • Subscribe
    • Request for Information
    • Careers at PGIM
    • Job Opportunities
    • All News
    • Press Releases
    • In the News
    • Facts & Figures
    • Media Contacts
Coins
Defined Contribution

Five Areas of Focus for Defined Contribution PlansFiveAreasofFocusforDefinedContributionPlans

By Josh Cohen — Apr 2, 2018

10 mins read

Share
  • Mail
  • LinkedIn
  • Twitter
  • Copy URL
Download White Paper

Share

In today’s environment, the growing reliance as a primary retirement savings vehicle, default-driven behavior, and increasing fiduciary scrutiny continue to characterize the DC landscape.

Given these trends, we’ve identified the five key areas plan sponsors and their advisors should focus on to help participants meet their retirement liabilities and manage key risks.

The paper addresses the answers and the lingering questions plan sponsors have about plan design, public policy, investments, default options, and post retirement.

 

1. Plan Design

More strategic, comprehensive, and outcome oriented

Plan design is critical to helping participants meet their retirement liabilities and it drives participant behavior. Since the Pension Protection Act of 2006, default-driven plan design has become prevalent as plans have adopted features such as automatic enrollment, automatic escalation, qualified default investment alternatives and re-enrollment.

2. Legislation, regulation and litigation

Opportunities and challenges

Whether it’s tax reform, fiduciary rules, class action lawsuits, or a safe harbor for retirement income, what goes on in Washington and the courts has a major impact on plan sponsors’ actions related to benefit plans and thus, their employees’ ability to meet their financial goals.

 3. Investments

Bringing an institutional approach to the individual investor

To help participants meet their long-term goals, plan sponsors will need to take more of an institutional approach to investment menu design. This includes offering more streamlined options while also expanding investment coverage to diversifying asset classes and strategies.

4. The Default Option

Optimizing participant outcomes

With the majority of new cash flows going into the plan default option, the success of these strategies is directly tied to the success of participants in meeting their desired long-term outcomes. Strong acceptance of auto-features and re-enrollment following the Pension Protection Act of 2006 have reinforced the importance of the Qualified Default Investment Alternative (QDIA), making it the focus of sponsors and advisors going forward.

5. Post-retirement

Addressing the unique needs of retirees.

The focus up to this point in the industry has largely been on helping individuals accumulate sufficient assets to achieve their retirement goals. However, this is solving for only part of the challenge as participants will be faced with new risks in meeting their retirement spending needs.

 

 

Download White Paper
Learn more
Defined Contribution

Helping individuals through world’s leading plan sponsors to become retirement ready by meeting their liabilities 

Learn more

  • By Josh CohenHead of Institutional Defined Contribution, Institutional Relationship Group, PGIM

You may also like

Spending in Retirement
Defined Contribution

Spending in Retirement

Jul 3, 2020

Understanding expenses in retirement and the idea of using a “Needs and Wants” framework for designing income-oriented investment solutions.

Defined Contribution Investments on Trial
Defined Contribution

Defined Contribution Investments on Trial

By Josh Cohen — Jun 11, 2018

In the DC space, there is significant debate as it relates to the appropriate investment approach to help participants build and manage retirement savings.

Bridging the Gap to Enhance Retirement Security
Defined Contribution

Bridging the Gap to Enhance Retirement Security

Apr 20, 2020

Securing a comfortable retirement prior to the COVID-19 outbreak was difficult enough, and the pandemic only adds to the challenges.

PGIM does not establish or operate pension plans.

  • Insights

    • Megatrends

    • Annual Best Ideas

    • Quarterly Market Outlooks

    • Market Events

    • Thought Leadership

    • Events & Webinars

  • Investment Themes

    • ESG Investing

    • Investing in Alternatives

    • Reaching for Yield

  • Clients

    • Clients We Serve

    • Defined Contribution

    • Institutional Relationships

    • Advisory Solutions

  • About

    • Overview

    • Leadership

    • History

    • Inclusion & Diversity

    • Global Locations

    • Contact Us

    • Subscribe

    • Request for Information

  • Careers

    • Careers at PGIM

    • Job Opportunities

  • Newsroom

    • All News

    • Press Releases

    • In the News

    • Facts & Figures

    • Media Contacts

PGIM Logo
  • Terms & Conditions
  • Privacy Center
  • Accessibility Help
  • UK Regulatory Disclosures

Prudential Financial, Inc. and its related entities.

For Professional Investors only. All investments involve risk, including the possible loss of capital.

It is for informational and educational purposes only and should not be construed as investment advice or an offer or solicitation in respect of any products or services to any persons who are prohibited from receiving such information under the laws applicable to their place of citizenship, domicile or residence. PGIM, Inc., is the principal asset management business of PFI and is a registered investment advisor with the US Securities and Exchange Commission(SEC). Registration with the SEC does not imply a certain level of skill or training.  PGIM is a trading name of PGIM, Inc and its global subsidiaries.    

In the United Kingdom, information is issued by PGIM Limited with registered office: Grand Buildings, 1-3 Strand, Trafalgar Square, London, WC2N 5HR. PGIM Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) of the United Kingdom (Firm Reference Number 193418). In the European Economic Area (“EEA”), information is issued by PGIM Netherlands B.V. with registered office: Gustav Mahlerlaan 1212, 1081 LA  Amsterdam, The Netherlands. PGIM Netherlands B.V. is, authorised by the Autoriteit Financiële Markten (“AFM”) in the Netherlands (Registration number 15003620) and operating on the basis of a European passport. In certain EEA countries, information is, where permitted, presented by PGIM Limited in reliance of provisions, exemptions or licenses available to PGIM Limited under temporary permission arrangements following the exit of the United Kingdom from the European Union. These materials are issued by PGIM Limited and/or PGIM Netherlands B.V. to persons who are professional clients as defined  under the rules of the FCA and/or to persons who are professional clients as defined in the relevant local implementation of Directive 2014/65/EU (MiFID II).  

In Japan, investment management services are made available by PGIM Japan, Co. Ltd., ("PGIM Japan"), a registered Financial Instruments Business Operator with the Financial Services Agency of Japan. In Hong Kong, information is provided by PGIM (Hong Kong) Limited, a regulated entity with the Securities & Futures Commission in Hong Kong to professional investors as defined in Section 1 of Part 1 of Schedule 1 (paragraph (a) to (i) of the Securities and Futures Ordinance (Cap.571). In Singapore, information is issued by PGIM (Singapore) Pte. Ltd. (“PGIM Singapore”), a Singapore investment manager that is licensed as a capital markets service license holder by the Monetary Authority of Singapore and an exempt financial adviser. These materials are issued by PGIM Singapore for the general information of “institutional investors” pursuant to Section 304 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”) and “accredited investors” and other relevant persons in accordance with the conditions specified in Sections 305 of the SFA. In South Korea, information is issued by PGIM, Inc., which is licensed to provide discretionary investment management services directly to South Korean qualified institutional investors on a cross-border basis.    

Prudential Financial, Inc. of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom. PGIM, the PGIM logo and Rock design are service marks of PFI and its related entities, registered in many jurisdictions worldwide.  The information on this website is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. In making the information available on this website, PGIM, Inc. and its affiliates are not acting as your fiduciary.    

©2021 PFI and its related entities.