Harmonizing Your DB and DC Investment Approaches

Harmonizing your DB and DC investment approaches

If you are a plan sponsor who has outsourced, or has considered outsourcing your organization’s DB plan, why not do the same for your DC plan?

By Kevin Turner

While an organization's defined benefit (DB) and defined contribution (DC) retirement plans often share the same investment committee members, these plans don't always share a consistent investment approach. If you are a plan sponsor that has outsourced, or has considered outsourcing your organization's DB plan, why not do the same for the DC plan? Harmonizing DB and DC investment approaches can deliver economies of scale and help simplify and aggregate responsibilities, while demonstrating fiduciaries' strong adherence to best practice governance disciplines.

This article discusses how harmonizing your investment approach across plans may lead to improved outcomes and a more defensible fiduciary position.

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Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.