Balancing Longevity Risk and Market Risk In Target Date Funds

7 Pages Posted: 6 Oct 2010

See all articles by Brian Jacobsen

Brian Jacobsen

Allspring Global Investments

Christian Chan

Wells Fargo Funds Management, LLC

Olivia Barbee

Wells Fargo Funds Management, LLC

Date Written: October 1, 2010

Abstract

There are two basic types of risk that investors try to balance when saving for retirement: longevity risk and market risk. Using an asset-liability framework, we demonstrate how creating a defined contribution plan that encourages participants to contribute early, contribute increasing amounts, and invest in a target date fund with a conservative glide path helps achieve a balance of these two types of risk.

Keywords: Defined Contribution Plans, Glide Paths, Pension Fund, Target Date Funds

Suggested Citation

Jacobsen, Brian and Chan, Christian and Barbee, Olivia, Balancing Longevity Risk and Market Risk In Target Date Funds (October 1, 2010). Rotman International Journal of Pension Management, Vol. 3, No. 2, 2010, Available at SSRN: https://ssrn.com/abstract=1687771

Brian Jacobsen (Contact Author)

Allspring Global Investments ( email )

100 Heritage Reserve
Menomonee Falls, WI 53051
United States

Christian Chan

Wells Fargo Funds Management, LLC ( email )

100 Heritage Reserve
Menomonee Falls, WI 53151
United States

Olivia Barbee

Wells Fargo Funds Management, LLC ( email )

100 Heritage Reserve
Menomonee Falls, WI 53151
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
165
Abstract Views
1,776
Rank
271,378
PlumX Metrics