DC Sponsors Confront Risk Issues

Fred Schneyer

September 21, 2009 — Forty-two percent of corporate finance executives said they are very likely to limit high-risk investments for their defined contribution plans, according to a poll by CFO Research Services in collaboration with Prudential Financial. —

Respondents also reported that their companies are very likely to add investment products that offer some protection against market declines (44%) as well as more conservative target-date funds to their DC plans (38%), in line with a renewed focus on protecting employees’ portfolios from disruptive market performance.

In their views about automatic enrollment, finance executives confirm a migration toward DC plans that better support employees’ retirement planning. Forty-two percent of respondents say their companies are very likely to increase automatic enrollment and contribution escalation efforts. Respondents are less likely to say they will increase funding for DC plan education in the next two years.