Defaulting Retirement Distributions Out of Defined-Contribution Plans: A Role for Managed-Payout Target-Date Portfolios

Journal of Retirement, Vol. 3, No. 3, pp. 12-19, Winter 2016

https://doi.org/10.3905/jor.2016.3.3.012

Posted: 21 May 2019 Last revised: 28 Nov 2019

Date Written: December 7, 2015

Abstract

Default features in defined-contribution plans are designed to improve the retirement security of plan participants. To date, these have focused on the challenge of saving, ignoring the more complex challenge of dissaving. Automatic default provisions for drawing down participant account balances after retirement could be beneficial. Conceptually, the objective is to reframe the Zeitgeist of defined-contribution plans from that of savings plans closer to that of income continuation plans with pension-like features. This could be accommodated though a managed payout feature designed into the plan’s default investment strategy.

Keywords: defined-contribution, plan default options, target-date funds

JEL Classification: D91, G23

Suggested Citation

Fullmer, Richard K., Defaulting Retirement Distributions Out of Defined-Contribution Plans: A Role for Managed-Payout Target-Date Portfolios (December 7, 2015). Journal of Retirement, Vol. 3, No. 3, pp. 12-19, Winter 2016, https://doi.org/10.3905/jor.2016.3.3.012, Available at SSRN: https://ssrn.com/abstract=2639361 or http://dx.doi.org/10.2139/ssrn.2639361

Richard K. Fullmer (Contact Author)

Nuova Longevità Research ( email )

Baltimore, MD 21297-1215
United States
253-820-6576 (Phone)

HOME PAGE: http://www.nuovalongevita.com

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