Now Available
Not Your Dad’s Retirement Plan—
Or at least it better not be
NOVEMBER 6, 2012, Chicago, IL – Appearing in the November/December 2012 issue of PSCA's national magazine, Insights, this article discusses the dangers of a reliance on Modern Portfolio Theory and what plan sponsors and plan participants can do about it. A quantifiable definition of "true" Retirement Income Security (RIS) is presented as the "new standard" when planning for a successful retirement. Benchmark and actual result comparisons are provided between a traditional asset allocation approach and an Adaptive Asset Allocation™ approach.
Free reprints of this 5-page article are available upon request by sending an email to [email protected].
Publications
Articles written and innovations by the Compass Institute have appeared in several publications as noted below. NOTE: Click the publication's icon to access the article.
Press Releases
Adaptive Asset Allocation™ Offers Forward-Thinking, Alternative Strategy for Retirement Plan Sponsors
FEBRUARY 13, 2013, Kenilworth, IL – A recent article published in the Plan Sponsor Council of America's (PSCA) national publication, Defined Contribution Insights, outlines a proactive, market-driven approach to 401K/IRA/mutual fund portfolio management.
Compass Investors "raises the bar" for retirement income replacement from the traditional 40-60% to a more realistic 100%. In doing so, they highlight that today's popular asset allocation strategies (Lifecycle, Target Date, Managed Accounts) will never generate the returns necessary to create this kind of nest egg. The Compass Institute challenges plan sponsors and plan participants to consider four simple recommendations that have been shown to mitigate the Retirement Income Security risk. Performance of Compass Investors' products has been demonstrated through independently audited back-testing against actual market results, not projections.
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Qualified Default Investment Rules May Spark Legal Action
OCTOBER 3, 2007, Chicago, IL – U.S. workers will have legal recourse against plan sponsors when, at retirement, they are left with insufficient balances in their 401(k)s because their Plans were defaulted into Formulaic Asset Allocation (FAA) funds, (Lifecycle, Target Date, Managed Accounts).
As a result of the rule change last year, plan sponsors are now at risk for litigation if retirees ask why their 401(k) funds were defaulted, guided or had advice made available that was doomed to fail them based on publicly available research. Participants will also want to know why plan sponsors did not guide them to successful alternatives that were known to be available. In the past, these kinds of disagreements would not have been played out in a court of law.
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Ticking Fiduciary Time Bombs
SEPTEMBER 1, 2007, Chicago, IL – Does the fact that all Formulaic Asset Allocation (FAA) approaches, e.g., Lifecycle, Target Date and etc., lead typical Plan Participants to an impoverished retirement expose Plan Fiduciaries to non-defensible liability?
As it is now a matter of public record that FAA is a failed approach that does not prudently serve the Plan Participant’s best interest, Plan fiduciaries will not be able to claim they “did not know.” This reality, when combined with the provisions of the Pension Protection Act of 2006—which provide that a “complaining participant” can challenge in a court of law the quality of advice the Plan Sponsor made available to the Plan—creates a ticking fiduciary liability “time bomb.”
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Free copies of this 42-page Report, 37-page Appendix and/or a 15-page Abstract and Report Overview are available upon request by sending an email to [email protected].
Retirement Plan Participants Using Any Formulaic Asset Allocation (FAA) Approach—Lifecycle, Target Date, Balanced Funds, Managed Accounts and Monte Carlo Simulation—Are Exposed to the Largest Risks and Assured of Not Having Nearly Enough Money to Retire
AUGUST 1, 2007, Chicago, IL – The Compass Institute report—The Paradox of Asset Allocation for Retirement Plan Participants: a Blessing or a Curse™—proves that unless an Adaptive Asset Allocation™ (AAA) Approach is used, Plan Participants can never achieve anywhere near the returns needed over Market Cycles to provide them with Retirement Income Security. That despite the promises of safe harbor and 403 (c) protections, plan sponsors will have a nearly impossible task defending in a court room having directed complaining Participants to any FAA approach.
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Free copies of this 42-page Report, 37-page Appendix and/or a 15-page Abstract and Report Overview are available upon request by sending an email to [email protected].
The Fiduciary Trap™ – Plan Participants and The 4th Metric
SEPTEMBER 17, 2004, Chicago, IL – The Compass Institute study—The Fiduciary Trap™ – Plan Participants and The 4th Metric™—reveals that expected returns from Managed and/or Life Cycle/Life Style/Target Date Retirement fund investment approaches will not allow most Plan Participants to reach needed Retirement Plan value goals. Even if a Plan is 404(c) compliant, Fiduciaries must consider serious new questions given the ERISA standard that plan sponsors provide investment assistance appropriate to Participants’ needs.
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For a free copies of this 50-page report and/or a one-page abstract,
send an email to:
[email protected].