Revving Up the Performance of Your DC Investment Lineup

Liana Magner, CFAPartner, U.S. DC & Financial Wellness Leader

Mercer Investments

Typical Investment Structure

Do it for me Guide me Let me do it

Tier I

Target-Date Options

Tier II

Passive Core Options

Tier III

Active Core Options

Tier IV

Specialty Options

Target-Date Funds

Capital Preservation

Core Fixed Income Index Core Plus Fixed Income

Large Cap Equity Index Large Cap Equity

Small/Mid Cap Equity Index Small/Mid Cap Equity

International Equity Index International Equity

Brokerage Window

(Optional)

For illustrative purposes only.

Building a successful DC program

LOCATION DEMOGRAPHICS

EMPLOYEE DEMOGRAPHICS

NEEDS

INTERESTS

BEHAVIORS

COMMUNICATION PREFERENCES

10k+PARTICIPANTS

DESIGNING A PROGRAM TAILORED TO PARTICIPANT NEEDS

Average

participant age

44

Median account

balance

$15,000

Note: Sample data for illustrative purposes only

<5 Years

56%

5-10 Years

18%

10-20 Years

17%

20-30 Years

6%

30+ Years

2%

TENURE BREAKDOWN

4 YEARSMEDIAN

TENURE

Capitol

Preservation

18%

Other

2%

Fixed Income

7%

Equity

36%

TDF

38%

TOTAL ASSET ALLOCATION

EQ UI TY

& TDF

FO CUSED

How many white label investment funds do you offer?

1. None

2. 1-2

3. 3-4

4. 5-6

5. All

THANK YOU TO OUR SPONSOR

Do you offer custom target-date funds?

1.Yes

2.No

3. I don’t know

THANK YOU TO OUR SPONSOR

Within your investment fund lineup, what is your top

priority for 2020?

1. Review your target-date fund objectives

2. Evaluate investment fees

3. Simplify your core lineup

4. Evaluate a retirement income tier

5. Review managed accounts

6. Evaluating an ESG option

7. None of the above

8. All of the above

THANK YOU TO OUR SPONSOR

Kevin A. EdwardsSenior Investment Director

Hartford HealthCare

Hartford HealthCare

TOTAL DC ASSETS

$1.4B

NUMBER OF

PARTICIPANTS

30,000

ABOUT PLAN:• Consolidated 30 plans down to 3.

• Changed QDIA from asset allocation program to Target-

Date (78% of total). Also still offer core menu and brokerage

window.

• Have auto-enrollment with annual auto-escalation to 6%.

Discussing increase based on SECURE Act expansion.

• Participation, Education and Governance have been critical

areas of focus as system has grown.

• Current discussion on fiduciary responsibility regarding

decumulation.

Kelly A. BryantDirector, Retirement Plan Investments

UnitedHealth Group

UnitedHealth Group

TOTAL DC ASSETS

$15.8B

NUMBER OF

PARTICIPANTS

223,000

ABOUT PLAN

Significant plan growth driven by mergers and acquisitions.

“Modernized” investment lineup in August 2019:

• Streamlined number of investment options

• Updated white-label fund names to align with

investment objective

• Negotiated lower investment management fees

• Modified participant website - grouped investment

options by tier structure utilized in communications

• Enhanced investment diversification

Sue WaltonSenior Vice President, Senior Retirement

Strategist, Retirement Strategy GroupCapital Group | American Funds

DC Plan Success: Define, Measure, Improve

Saving phase• Healthy contributions

• Good investment results

0%

100%

Contributions

Investment Results

Years before retirementRetirement balance

Transition from contribution to payout

Post-retirement phase • Reasonable payout

• Good investment results

$0

$Bal.

Years in retirement

Retirement

Balance

Without

Earnings

For institutional investors only. Not for use with the public. © 2020 Capital Group. All rights reserved.

For illustrative purposes only. Not intended to portray an actual investment.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Revving Up the Performance of Your DC Investment Lineup