J.P.Morgan Asset Management Explores Impact of Pension Protection Act on DC Plans as 10-year Anniversary Approaches, Finds Many Participants Not Allocating Assets Appropriately
April 27, 2016 (New York, NY) – J.P.Morgan Asset Management today released a new piece, "Retirement Reset: How re-enrollment can help strengthen U.S. retirement security." The paper explores the state of the U.S. retirement system 10 years after the passage of the Pension Protection Act (PPA), finding that although progress has been made for defined contribution (DC) participants, many Americans remain woefully unprepared for a retirement that may last upwards of 30 years.
Re-enrollment quickly improves asset allocation for many participants, especially when the plan’s QDIA is a target date fund (TDF). Because participants are defaulted into a TDF based on their age, the asset allocation reflects their investment time horizon, while the fund’s “glide path,” which changes with a participant’s age, helps ensure participants maintain an appropriate allocation over time. For plan sponsors, a re-enrollment can bolster confidence that participants are on a sensible investing path and have a decent chance of staying on that path.
Anne Lester, Head of Retirement Solutions, J.P.Morgan Asset Management
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J.P.Morgan Asset Management, with assets under management of $1.7 trillion, is a global leader in investment management. J.P.Morgan Asset Management’s clients include institutions, retail investors and high net worth individuals in every major market throughout the world. J.P.Morgan Asset Management offers global investment management in equities, fixed income, real estate, hedge funds, private equity and liquidity. JPMorgan Chase & Co. (NYSE: JPM), the parent company of J.P.Morgan Asset Management, is a leading global asset management firm with assets of approximately $2.4 trillion and operations in more than 60 countries. Information about JPMorgan Chase & Co. is available at JPMorganChase.com.
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