Dimensional provides a wide array of investment solutions for defined contribution plans, including asset class and target risk strategies. We manage over $30 billion in defined contribution assets.
We believe investment options in defined contribution plans should be broadly diversified, carry low fees, and follow a long-term investment orientation consistent with retirement plan investing. Dimensional is particularly well positioned to serve a defined contribution market focused on helping participants invest in appropriately managed asset allocation portfolios.
Tom Kmak, CEO of Fiduciary Benchmarks, explains how plan design techniques such as automatic enrollment and automatic escalation can improve retirement saving outcomes for millions of Americans.
Workers' confidence about their ability to live a comfortable lifestyle in retirement has dropped to its lowest point in 23 years. Dimensional Head of DC Services Tim Kohn, Boston Research Group President Warren Cormier, and Dimensional SmartNest Vice President Austin Rosenthal analyze why and discuss potential solutions.
Peng Chen discusses his recent paper on optimal withdrawal strategies. The paper, which received the 2012 Academic Thought Leadership Award from the Retirement Management Journal, evaluates common withdrawal, or spending, strategies based on a new measurement--the withdrawal efficiency rate.
Tim Kohn, head of Defined Contribution at Dimensional, talks to three industry experts—David Booth, Bill Bradley, and Nobel laureate Robert C. Merton—about Dimensional's unique research-driven approach to next generation retirement solutions.
Boston University professor and DC expert Zvi Bodie explains what's wrong with the current generation of target-date funds.
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David Wray, president of the Profit Sharing/401k Council of America, discusses the increasing health of the DC system, especially after the stress test of 2008, and the importance of new ideas being introduced to the industry.
In The News
Dimensional Fund Advisors announced that it continues to increase its presence in the defined contribution arena through dedicated resources and strong relationships with plan sponsors and financial advisors. On December 31, 2012, Dimensional reported over $20 billion in DC assets.
A video in which David Booth discusses defined contribution plan innovations with P&I editorial page editor Barry Burr.
A video in which Senator Bill Bradley discusses the shortcomings of defined contribution plans.
A video in which David Wray discusses the latest trends in the 401(k) marketplace.
A video in which David Wray addresses "open architecture" in 401(k) plans.
A discussion of risk as it relates to retirement readiness and its implication for plan sponsors and today’s popular default solutions.
This collection of published articles and papers represents some of the DC industry’s most insightful thinking on plan design, communication and education, and global trends.
Plan sponsors can take a strategic approach to plan design to help employees meet their income or budgeting needs in retirement. Relying in part on Dimensional research, this paper explores plan design structures that target income as the desired plan goal or outcome.
Uncertainty over one's future income trajectory is often substantial, and can significantly complicate planning for retirement. Our research shows that a saving guideline incorporating information about household income as it changes over time (dynamic saving) can improve retirement success rates for most households relative to a static rule-of-thumb approach.
How much retirement income is enough? With defined contribution plans, future retirees are asked to take on more responsibility for their retirement outcomes than in the past. Understanding how to arrive at a target income replacement rate can be helpful for future retirees and plan sponsors alike.
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By Peng Chen
, David Blanchett and Maciej Kowara
This article introduces a framework to determine the relative efficiency of different withdrawal strategies. It finds that the primary method employed by many practitioners, where a constant real dollar amount is withdrawn from the portfolio until it "fails," is often the least efficient approach to maximizing lifetime income for a retiree.
By Zvi Bodie and Henriette Prast
This paper examines some of the main behavioral patterns that determine personal saving, investment, and retirement decisions, and considers ways to move them in a socially desirable direction. Empirical evidence from other countries is considered in light of proposed changes to the system in the Netherlands.
DC participants may be able to create a better retirement by taking advantage of a new set of products focused on an appropriate income replacement rate and strategies based on "income outcomes" as opposed to "lump sum outcomes."
Maintaining an asset allocation suitable to every investor''s specific risk profile requires periodic rebalancing. Marlena Lee analyzes the benefits and limitations of several rebalancing strategies.
Jim Davis illustrates the dangers of treating historical efficient frontiers as a reliable characterization of the risk/return tradeoff that is currently available to investors.
Fund List for defined contribution plans.