Research

Public opinion polls consistently show that a large majority of Americans believe that retirement is in crisis and Americans will have trouble achieving financial security.

Enhancing Retirement Outcomes Through Diversification and Yield

Technology, Innovation, and Alternative Investments in Defined Contribution Plans

Trends in DC Plan Investments for U.S. Plan Sponsors and Industry Stakeholders

A Guide for U.S. Plan Sponsors and Industry Stakeholders

Press Release for Liquidity Framework Paper

Evidence from the Experience of Pension Funds

A new report from Georgetown University’s Center for Retirement Initiatives (CRI) and CEM Benchmarking (CEM) finds that adding illiquid assets, such as private equity, real estate, and infrastructure, to the target date funds (TDFs) of defined contribution (DC) retirement plans would have resulted in a 0.15% (15 basis points) increase in return per year over a decade. When applied to all U.S. target date options, such an increase would currently represent $5 billion in additional annual net returns.

Defined benefit plans, endowments, and foundations have long enjoyed the benefits of investing in private real estate, namely diversification, lower volatility of returns, a hedge against inflation, and the potential for improving risk-adjusted investment performance. This paper considers the current inflationary environment, and the impact core private real estate can have, not only in defined contribution (DC) target date portfolios, but also in multi-asset inflation-sensitive options for participants.

How and why the new crypto investment
option brings the 401(k) into the 21st century

Consistent with our mission of enhancing retirement outcomes, DCALTA has published a practical framework to provide plan sponsors clarity on the implementation of daily valuation of private assets.

We examine the impact of including private investment funds into diversified (e.g., balanced and target date fund) portfolios that otherwise hold only public stocks and bonds. Our analysis utilizes a comprehensive sample of 2,515 U.S. private equity funds to create simulated portfolios for 1987-2017 that invest part of their overall equity allocation in these funds. We find that investing in private funds always increases average portfolio returns and reliably increases Sharpe ratios (return per unit of risk). The results are robust when accounting for the inclusion of higher fees for the private portfolio and while randomly selecting a few funds from each vintage year (e.g., 10), suggesting that the results are feasible in practice for many investor types.