John Hancock Retirement Plan Services will offer two suites of target-date funds, providing participants with a choice of either “to” funds, which are composed mainly of bonds at retirement, or “through” funds, which maintain a substantial equity allocation well into retirement.
John Hancock’s new Retirement Choices target-date portfolios are designed to take participants “to” retirement. They can switch to another investment strategy at time of retirement. The all-index fund asset mix features a lower amount of equities near retirement.
Retirement Choices joins John Hancock RPS’s original Lifecycle suite of TDFs, which was introduced in 2006 and has been renamed Retirement Living. The Retirement Living Lifecycle Portfolios maintain a higher exposure to equities during retirement.
The glide path for Retirement Choices portfolios features a lower allocation to equities and slopes down at a faster pace than it does for the Retirement Living portfolios.
Before launching Retirement Choices, John Hancock RPS surveyed almost 1,000 participants to learn what they want in asset allocation solutions generally and TDFs specifically. About 83% felt it was important for their plan to offer a choice of target-date funds designed to meet the needs of different types of investors. When asked about preference for “to” retirement versus “through” retirement lifecycle options, respondents were split almost evenly.
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