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Working Americas who have part of their retirement savings in Defined Contribution plans have faced poor savings outcomes the last couple of years.  Now comes a new trade association to help tackle how plan participants can achieve better outcomes by helping people meet their retirement income goals.

Background and News:

To help Defined Contribution (‘DC’) plan participants achieve improved retirement savings outcomes, numerous Investment Managers have modified the glide path of their target date funds offerings as well as introduced products with guaranteed income payouts. Furthering the evolution of the Defined Contribution industry, we now have some of the largest defined contribution experts at large investment and insurance companies as well as consultants, lawyers and financial/retirement researchers coming together to form a new trade group, “Defined Contribution Institutional Investment Association” or DCIIA.

To belong to the DCIIA, the investment and insurance companies pay $15,000 each. Consulting firms like Hewitt, Mercer and Ibbotson have paid $3,500 a piece. Plan sponsors can join for only $1,000. To date, the association has about 40 members.

While there has yet to be any material research or insights published by the trade association, we have found that the association’s mission statement is supported by five core beliefs:

The primary role of defined contribution plans is to create retirement income adequacy. Every plan should aim to help workers accumulate savings sufficient to support their income needs in retirement.

Well-designed default programs can improve retirement outcomes. Increased savings and better investment returns will result from auto-escalation of contribution levels and default investment options that take advantage of institutional asset management techniques.

The regulatory framework and industry infrastructure must offer full support for institutional investment approaches and products. Defined contribution plans need access to the complete toolkit of investment, retirement income and advice solutions.

Open architecture allows plan sponsors and their advisors to assemble the best combination of investment solutions for their participants.

Full transparency on pricing and revenue sharing is critical for plan sponsors to determine the optimal combination of solutions that will improve retirement outcomes for their participants.

You can find out more about DCIIA on their website as well as the official press release .