Products August 3, 2015

Goldman Sachs Unveils Retirement Share Class

R6 shares offer retirement investors a lower expense ratio than current institutional share classes from Goldman Sachs Asset Management.
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Goldman Sachs Asset Management (GSAM) has introduced an R6 retirement share class across 54 mutual funds, which the firm says underscores its commitment to retirement investors.

The initial launch includes 49 funds that became available for purchase on July 31.  The remaining funds will be launched later this year. 

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Retirement clients gain access to a cost-effective investment vehicle with a lower expense ratio than GSAM’s current institutional or I share class. Class R6 shares are generally available only to certain types of employee benefit plans. The R6 shares will not pay any form of intermediary compensation, which includes 12b-1 and/or distribution, service, sub-TA or any other fees. Like GSAM’s Class IR and Class R shares, they are not sold directly to the public.

The R6 retirement share class offers cost and transparency, two increasingly important considerations when structuring investment menus for defined contribution plans, notes Greg Wilson, head of defined contribution investment only (DCIO) sales for third-party distribution at GSAM.

More information is at GSAM’s website.

Data & Research August 3, 2015

Matches, Automatic Features Becoming More Common

Twenty-six percent of 401(k) assets are now in model portfolios and TDFs.
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Fifty-five percent of plan sponsors funded a match in 2014, up from 52% in the previous year, according to Ascensus’ analysis of the retirement plans it serves.

In addition, 18% of plans automatically enrolled participants in 2014, up from 15% in 2013. Assets in model portfolios and target-date funds (TDFs) have surged from 17% of all plan assets in 2011 to 26% in 2014. 

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Citing data from Morningstar, Ascensus said that 80% of employees who were automatically enrolled into a managed account remained invested in the fund two years later, and 86% of employees invested in managed accounts were properly diversified according to their age and risk tolerance.

Eighty-five percent of new enrollees sign up for their retirement plan online, signaling a clear shift to digital, Ascensus said. Retirement calculators can also be very helpful for participants; nearly 18% of those who used a calculator increased their savings rate after using it, and 37% of employees who were not participating in their retirement plan joined it after using the calculator. (See “Your Clients Auto-Enroll, Now What?”)

“We continue to see the emergence of new approaches and tools in the retirement space, leading to increased participation, but the ultimate goal remains to improve retirement readiness among savers,” says Gene Cufone, senior vice president of retirement administration at Ascensus. “Ascensus’ objective is to help people save for the future, and the current trends are supporting that collective goal. Automatic features, expanded employer match programs and guided approaches from plan advisers will remain a differentiator for aspiring retirees.”

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