Making Defined Contribution Plans More Effective

Transcription

1 Making Defined Contribution Plans More Effective Understanding Your Needs and Concerns Investment Products Offered: - Are Not FDIC Insured - May Lose Value - Are Not Bank Guaranteed There is no guarantee that any forecasts or opinions in this material will be realized. Information should not be construed as legal or investment advice.

2 Discussion Objectives > Share insights from AllianceBernstein research > Listen to your thoughts on issues of concern to plan sponsors > Gather information to create your custom benchmarking report > Define next steps for continuing our dialogue 1

3 About the Research From AllianceBernstein > Plan sponsor research Survey of 1,026 defined contribution (DC) plan sponsors Equal number of respondents in each of the five market segments > Plan eligible employee research Survey of 1,070 eligible full-time employees Four attitudinal categories combined into two segments 2

4 The Findings in a Nutshell > The plan sponsor call: Keep it simple > Plan sponsors want plans that Focus on participant needs Are user-friendly Provide personal service > Plan sponsors want plans that help them create better outcomes for their employees > The participant echo: Just do it for me > Participants want plans that Require little work to join Require little work to invest Minimize tough decisions > Participants want plans that help them achieve their retirement objectives 3

5 A New Paradigm in DC > Moving from adding features with perceived benefits, which added complexity, to effective simplicity > The Pension Protection Act (PPA) empowered plan sponsors to consider Automatic enrollment Automatic deferral increases A Qualified Default Investment Alternative (QDIA) 1 2 4

6 What Leading Plan Sponsors Are Doing Now > Asking themselves questions about core plan issues Are we getting the best value for our plan? Are we meeting all of our fiduciary obligations? Do we have the right investment lineup? Do we provide a communications program that works? Are we receiving the type of service we need? Is the plan effectively meeting our goals? > Benchmarking their experience > Defining areas for plan enhancement 5

7 Are We Getting the Best Value for Our Plan? > Only 53% of plan sponsors were confident or very confident that they understood all of the fees they pay for their plans > Four out of 10 plan sponsors said they paid explicit fees for plan services, but 12% weren t sure 3 4 6

8 Are We Meeting All of Our Fiduciary Obligations? > Many DC plan sponsors don t consider themselves fiduciaries > Just over half feel confident that all individuals are aware of their fiduciary status 5 7

9 Do We Have the Right Investment Lineup? > A majority of plan sponsors said that a diverse plan should have less than 16 funds > Just 53% rate their investment menu as very good/excellent

10 Do We Have the Right Investment Lineup? > 23% percent said their plan did not have a default option > More plans are adopting a QDIA 10 9

11 Does Our Communications Program Work? > Most employees see themselves as Accidental investors > They have a low level of confidence about retirement

12 Are We Receiving the Type of Service We Need? > Most plan sponsors consider consultative services most important > The greatest unmet needs

13 Is the Plan Effectively Meeting Our Goals? > 72% of DC plans have participation rates below 80% > Most plan participants are not comfortable making their own investment decisions

14 The Value of Benchmarking Your Experience > Provides context to identify top priorities > Defines potential action items for plan enhancements > Supports your ability to meet your fiduciary obligations 13

15 Next Steps > Develop benchmarking report based on your input today > Meet to discuss the report and prioritize specific recommendations > Continue dialogue to help you and your employees achieve your goals 14

16 Investors should consider the investment objectives, risks, charges and expenses of the Fund/Portfolio carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at or contact your AllianceBernstein Investments representative. Please read the prospectus and/or summary prospectus carefully before investing AllianceBernstein L.P. AllianceBernstein Investments, Inc. (ABI), is the distributor of the AllianceBernstein family of mutual funds. ABI is a member of FINRA and is an affiliate of AllianceBernstein L.P., the manager of the funds. 15