Use of Alternative Assets in Target Date Funds: Challenges, Strategies, and Next Steps (Policy Report 20-01, February 2020)

This report describes the potential benefits that allocation to alternative assets could offer a TDF’s investment portfolio, including enhanced retirement income for participants, with some case study considerations and international examples.  It identifies and explains the unique challenges a fiduciary should consider when deciding to include alternatives in a TDF, as well as appropriate strategies a fiduciary may use to apply appropriate due diligence.  Finally, to support and encourage this innovation, the report recommends action by DOL to clarify a fiduciary’s responsibility when including alternatives in TDFs.

2018 Policy Innovation Forum Report: Driving Change to Improve Retirement Outcomes (CRI Policy Forum Report)

On June 19, 2018, the Georgetown University Center for Retirement Initiatives (CRI) convened an invitation-only one-day policy forum with approximately 100 senior industry leaders, policymakers, and stakeholders to examine some of the key challenges designing a retirement savings system focused on improving long-term outcomes to strengthen retirement security for millions of Americans. This report provides a comprehensive overview of the discussion held during this event, covering innovative ideas and proposals for addressing some of the challenges faced in closing the access gap, improving the design and performance of investments in retirement savings plans, and identifying ways to build and deliver more-effective and attractive lifetime income options.

The Evolution of Target Date Funds: Using Alternatives to Improve Retirement Plan Outcomes (Policy Report, 18-01, June 2018)

This report highlights new analysis showing how target date funds (TDFs) can be modified to improve expected retirement income for individuals by between 11 and 17 percent with the inclusion of alternative assets.  Operational issues, such as liquidity, pricing, etc. can be easily addressed today, as demonstrated by the increased use of custom funds in DC plans.  Policymakers and plan sponsors should consider the inclusion of alternative assets classes in DC plans, specifically through target date structures.

MarketWatch

• Opinion: New solutions are desperately needed to prepare millions of Americans for retirement (MarketWatch, April 4, 2019)
• Opinion: How to make target-date funds even better (MarketWatch, January 18, 2019)
• Investing For Retirement: A Long-Term Game Many Workers Aren’t Even Playing (MarketWatch, February 18, 2018)

Forbes

• How Technology is Reshaping the Way Americans Prepare for Retirement (Forbes, January 15, 2019)

CRI Policy blog

• Retirement Savings in the Time of COVID-19: International Best Practices to Address Challenges Pablo Antolin (July 2020)
• Allow 401(k) Plans to Invest in Alternative Assets Charles E.F. Millard (January 2020)
• How to Evolve Default Options for Retirees in DC Plans Jason Shapiro (December 2019)
• Why Diversity in Investment Management Matters Robert Raben (October 2019)
• What Does An Aging Population Mean for Economic Growth and Investing? Paula Campbell Roberts (September 2018)
• Beyond ERISA: Other Regulatory Considerations for State-Sponsored Retirement Plans Supporter Access Only David Morse (June 2016)

Podcasts

• Episode 13: COVID-19 & Market Volatility: Can Greater Asset Diversification in DC Plans Lead to Better Outcomes?(May 7, 2020)
• Episode 06: Profiles in Leadership: A Conversation with John W. Rogers, Jr., the Founder & Chair of Ariel Investments(June 27, 2019)
• Episode 02: Is It Possible to Build a Better Target Date Fund?(February 27, 2019)

Webinars

• COVID-19 & Market Volatility: Using Alternative Assets in DC Plans: Will DOL’s New Guidance Encourage Greater Adoption? (June 9, 2020)
• Trends in the Design and Use of Target Date Funds (TDFs):  What Could Improve Retirement Income Outcomes? (November 2018)

• Court Ruling on Intel’s DC Plan Sparks Trepidation (Pensions & Investments, March 9, 2020)
• How Socially Responsible Corporations Will Solve the 401k Cashout Crisis (401(k) Specialist, February 12, 2020)
• Why Alternative Investments Should Be Included In Retirement Portfolios (RealClearMarkets, August 16, 2019)
• Should TDFs Be the Last Investment? (National Association of Plan Advisors, July 23, 2019)
• The Case For Alternatives In Retirement Portfolios (Financial Advisor Magazine, June 12, 2019)
• Retirement Technology Enhances How Americans Save (401kTV, April 1, 2019)
• Would Illiquid Assets in 401ks Be Crazy or Constructive? (401k Specialist, February 20, 2019)
• The New Retirement Strategy Barron’s (January 5, 2019)
• Add Alts to Target Date Funds? Policy Report Says Yes (ThinkAdvisor, October 22, 2018)
• The Urgent Case for Target Date Fund Diversification—Now (The 401(k) Specialist, October 19, 2018)
• Do 401(k) Plans Need the High Fees, Complexity of Liquid Alts? (Institutional Investor, October 19, 2018)
• Why Alternative Investments in 401k Target Date Funds Make So Much Sense (The 401(k) Specialist, August 27, 2018)
• Target-date outcomes improve with introduction of alternative investments (Employee Benefit News, August 15, 2018)
• Can Alternatives Spruce Up Target-Date Funds? (Financial Advisor Magazine, August 10, 2018)
• The Evolution of TDFs (WealthManagement.com, July 24, 2018)
• Are TDFs shorting retirement investors? (BenefitsPro, July 5, 2018)
• Daily Brief: Target Date Funds Should Have More Alts: Report (Wealth Management, June 28, 2018)
• Getting Serious About TDF Sequence of Returns Risk (Planadviser, June 22, 2018)
• Improved TDFs could lower risk, increase retirement income (BenefitsPro, June 21, 2018)
• Alternatives in target-date funds can increase retirement income, lower risk: report (InvestmentNews, June 20, 2018)
• Alternatives in target-date funds can increase retirement income, lower risk – report (Pensions & Investments, June 19, 2018)

Infographics

• Can the Use of Alternative Assets in Target Date Funds (TDFs) Improve Outcomes

Other

• Why Defined Contribution Plans Need Private Investments: The Benefits of Private Equity and Venture Capital in Diversified and Time-varying Portfolios,” (DCALTA and IPC, October 2019)
• Investing in (and for) Our Future (World Economic Forum, June 2019)
• QDIA evolutions — Moving defined contribution plans into the future (Willis Towers Watson, April 2019)
• Capturing The Benefits of Illiquidity (DCIIA, September 2015)