October 12, 2011, International, 401(k)/IRA, News
From the UK, ideas for better outcomes for DC participants
Would gradual annuitization from age 65 to 75 be better for DC plan participants in the UK than gradually switching from equities to government bonds from age 55 to 65?
The ‘lifestyling’ approach used by many defined contribution (DC) plans in the United Kingdom is producing smaller retirement account sizes for savers than ever before, and could be replaced by more innovative alternatives, a new report has found.
According to research conducted by Cass Business School and sponsored by BNY Mellon, the lifestyling approach—where investors’ accounts are automatically switched out of equities into government bonds in the 10 years preceding retirement—is now inadequate given the fall in equity markets and annuity rates.
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