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Retirement book proposes reinvention of DC
Identifying inefficiencies and potential solutions
Investment education isn't enough
In the book titled The Retirement Plan Solution: The Reinvention of Defined Contribution, the authors examine defined contribution (DC) systems from across the world and articulate how improvements can make DC plans a far more productive force in securing retirement for individuals.
Inefficiencies in the current system exist
The book argues that not only are there inefficiencies in the current system during the accumulation phase — such as wasteful investment management practices — but there are also inefficiencies in the spending phase after retirement, to which too little attention is paid.
"Now that DC has become the dominant form of retirement provision for private sector workers, the system has to work better and more efficiently," says co-author, Bob Collie. "That begins with explicitly acknowledging the goal — a means to provide financial security for life — and redesigning the defined contribution system to that end. A savings vehicle alone is not enough."
Looking outside the box
The authors of The Retirement Plan Solution consider the defined contribution systems of the United States, Australia, the Netherlands and Canada to note best practices and generate ideas for redesigns that go beyond traditional concepts.
"We're really pretty optimistic. There are many possible solutions that we outline," said co-author, Don Ezra. "What's more, we give individuals a framework for checking the extent to which they will have enough in retirement for basic expenses, for their desired lifestyle and perhaps also for bequests."
About the authors
The Retirement Plan Solution: The Reinvention of Defined Contribution is written by Russell Investments' Managing Director, Investment Strategy and Consulting Bob Collie and Co-Chair of Global Consulting Don Ezra, along with former associate Matthew X. Smith, now a senior vice president and the national defined contribution practice leader at Aon Consulting.
"All of us at Russell congratulate Bob, Don and Matt on their retirement book and on providing thoughtful answers to some fundamental questions," said Andrew Doman, president and chief executive officer of Russell. "Russell Investments is steeped in a tradition of thought leadership, innovation and global vision, and the approach that this new book takes reflects that heritage well."
Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company.
USI-4243
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