Institutional Investor Forums – Defined Contribution Symposium

Transcription

 Institutional Investor Forums – Defined Contribution Symposium
 Page 1
Pursuing Outcome-Driven Approaches to Plan Design
September 16-17, 2014 | The Ritz-Carlton | Half Moon Bay, CA
Advisory Board
Corporate Plans:
Bernie Knobbe, Vice President, Global Benefits Corporate Total Rewards, AECOM
Cathleen deOrnelas, Financial Benefits Manager, Apple, Inc.
Carolyn Wood, Director of Retirement Benefits, Bimbo Bakeries USA, Inc.
Kevin McRaith, Manager, Retirement Plans, Cargill Inc.
Cindy Cattin, Director, Investment Operations & Risk Management, Exelon Corporation
John Casey, Director, Global Financial Strategy and International Benefits, Google, Inc.
Pete Apor, Director-Retirement Services, Fujitsu America, Inc.
Dale Neibert, Investment Officer & Analyst, H-E-B Brand Savings & Retirement Plan
Jim Farrell, Director, Global Benefits & Trustee, Retirement Plan, McKinsey & Company
Chad Ryan, Director, Retirement Plans, PepsiCo, Inc
Marc Keenan, Director, Pension Benefits & Investments, Pfizer, Inc.
Thomas C. Foster, Director Pension & Trust Investments, Pinnacle West Capital Corporation
Government Plans:
Michael Charette, Senior Investment Officer and Portfolio Manager, Municipal Employees' Retirement System of Michigan
Patricia J. Davis, Member Services Bureau Chief, Montana Public Employees Retirement Administration
Diane S. Kaiser, Manager, Choice 401(k) Plan, Public Employee Retirement System of Idaho
Sponsoring Organizations
Aon Hewitt
American Century
AQR
BlackRock
Capital Group
Franklin Templeton
Janus Capital Institutional
JP Morgan
MSCI
Prudential
Schroders
State Street Global Advisors
Voya Investment Management
While the structural blueprint for successful participant-funded retirement plans may not be uniform, one fact remains clear: plan
sponsors know what the finished product should like look for their participant populations. “Successful retirement outcomes” may not
have a one-size-fits-all definition, but the path to that goal looks similar across industries and firm size. Structural plan improvements
such as streamlined and diversified menu options, effective communication strategies that not only reach, but educate participants,
and basic mechanisms that stimulate participant savings behavior, are a few of the many hallmarks that make sound foundations for
positive long term results. By exercising outcome-driven decisions, plan sponsors are demanding higher standards, not only for their
plans, but for their participants with whom they partner and share this important responsibility.
This year’s Defined Contribution Symposium endeavors to explore the factors defining the end goal of successful participant retirement
outcomes—and to purposefully retrace our steps from there to build the best plan possible. Through panel sessions, debates,
roundtable discussions, workshops and special guest speakers, we will explore a broad range of topics that DC plan sponsors must
concern themselves with in order to successfully set participants on a path towards an attainable, positive result.
Throughout the Symposium, we will hear from both providers and plan sponsors in order to obtain a wide range of views, opinions and
actionable solutions to share and evaluate experiences, objectives and outcomes.
Topics for discussion include:

Participant behavior-driven portfolio construction

Examining the balance between menu simplification and adequate investment diversification

Annuities and retirement income solutions for the participant de-cumulation phase

What’s happening in Washington—Upcoming policy implications

The resources—human and financial—involved in implementing plan features (auto-enrollment, advisory tools, etc)

The limits (or extents) of fiduciary duty

Innovative risk management, reducing participant risk exposure

Pinning participant health and wellness to retirement outcomes

Opportunities in alternatives: private equity, commodities, real estate

Leveraging plan resources for maximum affect: scale, partnerships and fees

Global differences and lessons learned from non-US retirement markets
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Tuesday, September 16, 2014
7:45 am
Registration and Continental Breakfast
Salon III Foyer
8:25 am
Chairman’s Welcome & App Tutorial
Salon III
App Tutorial:
Kip Miller, Director, Institutional Investor Forums
Symposium Chairman:
8:30 am
Benchmarking Session
Salon III
Session Moderator:
What are the issues, concerns and primary interests of your peers – senior plan sponsors for the larger US plans? In this opening
session and in subsequent sessions, attendees will be polled on a number of high-interest topics using an anonymous, interactive
electronic response system. By doing this, we will provide all attendees with useful benchmarks and unique insight into the concerns of
plan sponsors and their participants.
8:45 am
Moderated Group Discussion
Pushing the Industry Forward: How Do We Get There From Here?
Salon III
Moderator:
Drew Carrington, Senior Vice President and Head of Defined Contribution – Institutional, Franklin Templeton Investments
In a rapid-fire format, select members of the audience will be called upon to provide an update on the one retirement issue they believe to
be of critical importance, the one most in need of immediate industry collaboration and problem solving. The catch is that the respondents
must also offer their perspectives on how this issue should be addressed—including tangible solutions—for real impact that will lead to a
stated positive outcome.
9:15 am
Presentation
Actionable Steps Toward Participant Financial Wellness
Salon III
Presented by:
Rob Austin, FSA, EA, Director of Retirement Research, Aon Hewitt
Alison Borland, Vice President, Retirement Solutions & Strategies, Aon Hewitt
How can plans help their participants achieve greater overall financial wellness now, with the long term goal of developing solid
foundations for retirement? What are the implications of the seemingly small decisions that participants can make now that will have a
long term root impact on their financial futures?
Additional topic for discussion:

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The pros and cons of participants staying in plan through retirement
9:45 am
Panel Discussion
Revision or Reconstruction: Ensuring That Your Investment Menu Matches Your Reality
Salon III
Moderator:
William Ryan, Director, Client Relations Services, University of California
Panelists:
Toni Brown, CFA, Senior Defined Contribution Specialist, Capital Group
John Galateria, Head of North America Institutional, J.P. Morgan Asset Management
Brett Hammond, Managing Director and Head of Index Applied Research, MSCI
Fredrik Axsater, Senior Managing Director and Global Head of Defined Contribution, State Street Global Advisors
Today’s most forward thinking investment menus are more than just investments—they also serve as essential building blocks for a
participant’s financial future. Strategically speaking, the core menu can provide both a retirement savings vehicle and an active nudge
towards specific participant savings behaviors. While such objectives may be noble, does your plan match either in reality? This session
will discuss how to evaluate whether a plan is truly equipped to meet participant needs and in turn, productive steps toward further
revision or, where necessary, reconstruction.
10:30 am
Coffee Break
Salon III Foyer
11:00 am
Concurrent Workshop Series I
Workshop A
Managing Downside Risk in Retirement
Miramar I
Workshop Leader:
Hillary Bolton, Senior Managing Director, Janus Capital Institutional
As plan sponsors look to enhance and customize their investment offerings with alternatives, should additional investments be
considered among traditional assets? One of the plan participants’ prominent needs is to limit volatility across the investment
horizon. While hedge funds, real estate, and private equity have the potential to aide in volatility reduction, there are traditional
investment offerings specifically focused on managing volatility that are missing from most asset allocations, yet are deemed to add
value. This breakout session will examine the potential impact these long-only managed volatility strategies can have on your
participants’ retirement success.
Workshop B
What Drives Retirement Outcomes for Target Date Investors?
Miramar II
Workshop Leader:
Frank van Etten, Managing Director, Deputy Chief Investment Officer, Multi-Asset Strategies and Solutions, Voya Investment
Management
This workshop will explore how to define retirement success within the construct of a target date fund, using examples to illustrate the
key drivers of that outcome. Key-input variables such as savings rates, market assumptions and labor income assumptions will be
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demonstrated in an intuitive way. The session will also demonstrate how plans can model an optimal glide path after modeling the keyinput variables.
11:45 am
Concurrent Workshops Series II
Workshop C
Why Does a Simplified, Diversified Plan Line-Up Matter?
Miramar I
Workshop Leader:
Sri Reddy, Senior Vice President, Head of Full Service Investments, Prudential
This workshop session will explore behavioral insights and approaches to simplifying investment plan lineup in today's environment—
and why it’s important to do so. Topics for discussion include investor behavioral biases and top concerns, as well as how the industry
should proactively address these issues to leverage optimal outcomes.
Workshop D
The Ins and Outs of Income: A Plan Sponsor’s View
Miramar II
Workshop Leaders:
Stephen Bozeman, Director of CoRI Product Strategy, BlackRock
Paul A. Visconti, Manager of Retirement Benefits, Advance Publications
The Retirement Crisis has sharpened interest in helping participants understand and build retirement income. While not a panacea,
retirement income has been shown to increase retiree confidence and create clarity during the critical pre-retirement phase. This
session will explore the ins and outs of income, from efforts to simplify income solutions, to steps that plan sponsors can take to help
participants understand how retirement income can help them build better retirements.
12:30 pm
Lunch
Navio Restaurant
2:00 pm
Concurrent Workshops Series III
Workshop E
Designing a Smoother Ride: Risk-Based Diversification in TDFs
Miramar I
Workshop Leader:
Dan Villalon, CFA, Vice President, U.S. Head of Portfolio Solutions Group, AQR Capital Management
Target-date funds (TDFs) have become the preferred long-term investment vehicle for many defined-contribution plan sponsors and
their participants. However, we find that these funds generally do not consider short- to medium-term risks on the path to
retirement—risks that may impair an investor’s ability to stay invested for the long-term. This workshop session will explore an
alternative way to view the riskiness of target-date portfolios and proposes solutions designed to improve both intermediate and longterm outcomes.
Workshop F
Maximizing the Levers for Participant Success
Miramar II
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Workshop Leader:
Toni Brown, CFA, Senior Defined Contribution Specialist, Capital Group
Defined contribution plans have grown more and more complex. Today, it’s easy for plan sponsors to be overwhelmed by all the
variables they have to consider — fiduciary responsibility, employee demographics, automatic plan features, market risk, longevity and
more. This workshop seeks to simplify matters by narrowing the conversation down to two key levers for enhanced retirement
readiness: contributions and investment results. Focusing primarily on the latter, this session will outline action steps that plan
sponsors can take to improve participant allocations and get the most from their plan’s target-date option.
2:45 pm
Concurrent Workshops Series IV
Workshop G
Brain Surgery with Stone-Age Tools?
Miramar I
Workshop Leader:
Drew Carrington, Senior Vice President and Head of Defined Contribution – Institutional, Franklin Templeton Investments
Congratulations! You have successfully implemented auto-enrollment and aggressive auto-escalation features for your plan, but is it
enough to secure your participants’ retirement? What if you were able to help your entire pool of participants accumulate adequate
savings at retirement, but a substantial minority ended up scraping by on Social Security in the last years of their lives? Outdated and
overly simplistic fixed income investment options fail to adequately provide participants with the information and tools they need to
succeed in retirement. This interactive session will:

Test whether accumulation-oriented tools are sufficient to ensure retirement security

Explore how novel thinking about the existing fixed income toolset can engender opportunity

Address how plans can re-orient themselves to deliver robust, lower-risk solutions that can help improve retirement
outcomes for your participants.
Workshop H
Navigating Today’s Landscape for Government Plans
Miramar II
Workshop Leader:
Michael Charette, Senior Investment Officer and Portfolio Manager, Municipal Employees' Retirement System of Michigan
In this government plan “potpourri” session, we will explore some of the biggest issues facing public plans. From plan communications
and retirement income strategies, to gauging participant retirement readiness, where are government plans focusing their attention
and what are the next big steps to improving participant outcomes?
3:30 pm
Coffee Break
Salon III Foyer
3:55 pm
Benchmarking Survey of Plan Sponsors
Salon III
As a follow-up to our earlier benchmarking sessions, we will use an electronic polling system to anonymously survey attendees as to
their perspective and opinions on a range of issues plan sponsors are dealing with, the strategies they are considering, and the areas
getting most of their attention. The session leader will offer highlights from the survey to provide a snapshot of the industry at this
point in time.
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4:00 pm
Presentation
Reflections in the Mirror: Participant Perspectives on Saving and Investing for the Future
Salon III
Presented by:
Diane Gallagher, Vice President, DCIO Practice Management, American Century Investments
Experience is an important teacher. This session will uncover findings of a national study on attitudes and insights of defined
contribution plan participants from early career to pre-retirement. Hear how these respondents feel about what they have done, what
they are doing and what they wish they had done to save and invest for the future. In addition, what are some thoughts for plan
sponsors moving forward?
4:30 pm
Panel Discussion
Demanding More From Future Generations of Target Date Funds
Salon III
Moderator:
Brett Hammond, Managing Director and Head of Index Applied Research, MSCI
Panelists:
Robert Capone, Managing Director, Head of Defined Contribution, AQR Capital Management
Frank van Etten, Managing Director, Deputy Chief Investment Officer, Multi-Asset Strategies and Solutions, Voya Investment
Management
Lesley-Ann Morgan, Head of Global Strategic Solutions, Schroders
If the future is Target Date Funds, where are they leading us? The shift from off-the-shelf to customized products is revealing both the
demand and motivation for tailored investment solutions that address some of the most vexing participant savings problems. But are—
or can—TDFs be all that they’re cracked up to be? This session will take a critical look at where TDFs are headed and provide an
objective analysis of how this savings vehicle can better serve a greater number of participants.
5:15 pm
Plan Sponsor Case Study
Earning Internal “Buy-In” for Plan Overhauls
Salon III
After completing a merger with Constellation Energy, Excelon Corporation moved forward with a major plan overhaul, one that
ultimately aimed to leverage its large scale. The new plan features a streamlined core menu to increase value, diversification and
significant fee savings for participants. While the end result has been positive—both from an administrative and participant
perspective—making a convincing case for overhaul without a proven track record was in some ways more challenging than the actual
implementation. How can plan sponsors win internal “buy-in” when it comes to making significant changes to the plan?
5:30 pm
Plan Sponsor Case Study
Introducing a DB Investment Philosophy Into Your 401(k) Plan
Salon III
Dale Neibert, Investment Officer & Analyst, H-E-B Brand Savings & Retirement Plan
The H-E-B Brand Savings & Retirement Plan is an actively managed 401(k) plan administered by the Texas based H.E. Butt Grocery
Corporation. This unique plan is overseen by an in-house investment team that employs a pension plan philosophy through actively
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managed balanced hybrid funds. Notable emphasis is placed on alternatives including various hedge fund strategies, oil and gas, private
equity, commodities and real estate. By emphasizing ‘best of class’ investment strategies and capital preservation alongside a low
correlation mandate, overall portfolio risk has been kept to a minimum, resulting in long term net positive returns with comparatively
low risk exposure. This case study will explore the plan philosophy and discuss steps that sponsors can take to incorporate more “DB
characteristics” into their plan administration.
5:45 pm
Time At Leisure
6:15 pm
Cocktail Reception & Dinner
Miramar
Please join old friends and colleagues for cocktails and dinner, enjoying views of an expansive and rugged stretch of the Pacific
shoreline at sunset.
Wednesday, September 17, 2014
7:45 am
Breakfast Discussion Groups
Boardroom
At peer-moderated tables of 8-10 participants, plan sponsors will share their opinions and compare notes on a number of important
issues identified by the Advisory Board as worthy of discussion. Plan sponsors will be asked to contribute to the overall discussion with
the intention of sharing information and learning from others’ experiences. Participants will have the opportunity to change discussion
groups at the 30-minute mark, if they choose.
Table 1: Taking a Magnifying Glass to Fees
Discussion Leader:
Patricia J. Davis, Member Services Bureau Chief, Montana Public Employees Retirement Administration
From investment management fees to the oft ignored “fairness” issues surrounding revenue sharing, what are plans doing to keep fees
appropriate for the plan and for participants? Plan sponsors play the essential role in critically monitoring fee sources and, where it
makes sense, redirecting investment strategies to engage in cost-savings (while maintaining high quality investments for participants).
This plan sponsor will share some of the questions her plan is asking and will draw in perspectives from the audience.
Table 2: Do We “Get” The Extent of Fiduciary Liability?
Discussion Leader:
Peter G. Dunphy, Treasurer, Michelin North America, Inc.
As a sponsor, do you fully grasp the extent of your fiduciary liability? Not all plans may understand the scope of their liability, from the
importance of plan communications to the role of company stock options in the 401k line-up. Where are the biggest pitfalls for plans
and how can you go about securing them to strengthen your participants’ futures?
Table 3: Is There a Place for Liquid Alternatives?
Discussion Leader:
James E. Farrell, Director, Global Benefits & Trustee, Retirement Plan, McKinsey & Company
This table discussion will explore questions about the role of liquid alternatives in a 401k plan line-up. From fees to daily valuation and
immediate liquidity, how do alternative investments compare with actively managed equities or actively managed fixed income
options? Is there a place for alternatives in Target Date Funds?
Table 4: How Does Your Plan Benchmark Participant “Success?”
Discussion Leader:
 Page 9
Colin Orr, Benefits Manager, Genentech
What is—or should be—the definition of participant “success?” Is it possible to use actual data measurement or analytics to determine
positive participant retirement outcomes? And finally, what is the role of participant feedback in the overall scheme of benchmarking?
8:30 am
Presentation
Retiring From Work – Participating in Life
Salon III
Presented by:
Hillary Bolton, Senior Managing Director, Janus Capital Institutional
Plan sponsors are keenly focused on helping their participants achieve financial security in retirement. Given the low account balances
of many current retirees, and considering resource limitations, where should plan sponsors and investment managers focus their
efforts? Faced with these constraints, meaningful solutions must meet the varied needs of plan participants including liquidity, capital
preservation, and income generation. Innovative solutions should also be easily provided in the construct of a qualified plan. During this
session, we will examine how, as an industry, we can continue to partner with plan sponsors in this endeavor.
9:00 am
Panel Discussion
Translating Retirement Readiness to Retirement Income
Salon III
Moderator:
Steven Olson, Managing Director, Institutional Investor Forums
Panelists:
Chip Castille, Managing Director, Head of US Retirement Group, BlackRock
Sri Reddy, Senior Vice President, Head of Full Service Investments, Prudential
Nate Miles, CFA, Vice President and Head of US Defined Contribution, State Street Global Advisors
So much focus has been placed on preparing participants for retirement: encouraging increased savings rates, educating around ageappropriate asset allocations and helping participants with the interplay of other benefits like HSAs. But what about what comes after
the accumulation phase? This session will focus on what plan sponsors are doing to not only help participants reach an adequate level
of retirement readiness, but also to successfully draw down their savings.
9:45 am
Concurrent Workshop Series V
Workshop I
Essentials of Target-Date Design and Analysis
Miramar I
Workshop Leader:
Scott Wittman, CFA, CAIA, Chief Investment Officer, Asset Allocation & Quantitative Equity, American Century Investments
As target-date funds play an increasingly central role in plan defaults, selecting an appropriate solution for your participant base is even
more important. Investment consideration goes well beyond selecting between "to" versus "through" strategies. In this session, we will
explore five key principles for evaluating target-date funds including sequence of returns risk and abandonment risk, as well as how
equity allocation is an inadequate proxy for risk. Learn how these elements may help you evaluate suitable solutions to help your
participants achieve the highest likelihood of success.
Workshop J
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Global Lessons For the Accumulation Stage: Managing the Journey—And the Outcome
Miramar II
Presented by:
Johanna Kyrklund, Head of Multi-Asset Investments, Schroders
This workshop will outline lessons that DC plans have learned from their DB plans by embracing both greater diversification and
dynamism in the management of the default option. Using a case study from the UK as an example, this session will explore how
considering the market environment is just as important for DC as it is for DB investors when setting asset allocation (and not to just
set-and-glide).
10:30 am
Coffee Break
Salon III Foyer
10:55 am
Benchmarking Survey of Plan Sponsors
Salon III
As a follow-up to yesterday’s benchmarking sessions, we will use an electronic polling system to anonymously survey attendees as to
their perspective and opinions on a range of issues plan sponsors are dealing with, the strategies they are considering, and the areas
getting most of their attention. The session leader will offer highlights from the survey to provide a snapshot of the industry at this
point in time.
11:00 am
Case Study Discussion
Achieving Better Outcomes Through Menu Consolidation and Implementation: Applying What We’ve
Heard
Salon III
Panelists:
Alison Borland, Vice President, Retirement Solutions & Strategies, Aon Hewitt
Fred Reish, Partner, Drinker Biddle
John Galateria, Head of North America Institutional, J.P. Morgan Asset Management
This case study will discuss the steps plan sponsors can take to create a more effective DC plan that achieves better outcomes for
participants. The session will examine Exelon Corporation’s comprehensive redesign of their defined contribution plan. This process
consisted of implementing a custom glide path solution and simplifying the core line up, while providing increased levels of
diversification, conducting a re-enrollment and harmonizing managers across DB and DC plans.
11:45 am
Panel Discussion
Putting the Pieces of Participant Education & Financial Wellness Together
Salon III
Moderator:
Panelists:
Kim Dwyer, Vice President of Benefit Services, Advocate Health Care
Carolyn Wood, Director of Retirement Benefits, Bimbo Bakeries USA, Inc.
 Page 11
Jon E. Lara, Senior Director, Benefits Finance, DIRECTV
Neil F. Krus, Senior Manager, Benefits Retirement Plans, United Airlines
With the DC philosophy of “pure financials” behind us, many plan sponsors are engaged in a push towards more holistic approaches to
participant engagement and education. How can plan sponsors help their employees connect the dots when it comes to engaging them
in the plan, educating them about savings behaviors, or leveraging other benefits like HSAs? Additional topics for discussion include:

Implementing comprehensive targeted communications strategies

Planning for healthcare expenses in retirement

Retirement income illustrations

Auto-features that not only engage but encourage quality savings behaviors
12:30 pm
Moderated Group Discussion
What Is Your Best Takeaway?
Moderator:
Plan Sponsor to Be Invited
Over the past day and a half we have listened to thought leaders, industry experts and our peers. What are some of your best and
brightest takeaways gleaned from the Symposium—and some of the challenges you foresee in carrying them forward?
1:00 pm
Lunch & Guest Presentation
The Biggest Actions in Washington Likely to Affect Your Plans
Miramar
Presented by:
Fred Reish, Partner, Drinker Biddle
Looking forward, which near-term Washington policy actions are slated to have the biggest impact on plans and their participants—and
why? This session will explore a range of topics from recent legal decisions to anticipated DOL regulation on retirement income
projections to how demographic trends like longevity risk will impact plan administration. How should plan sponsors plan and act
accordingly?
2:15 pm
Program Concludes
 Page 12

Institutional Investor Forums – Defined Contribution Symposium

Transcription

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