U.S. Based Defined Contribution Institutional Investment Association Explores Affects of Low Interest Rates and Inflation on DC Plan Participants
January 10, 2023
A recent report by the U.S.-based Defined Contribution Institutional Investment Association explores how low interest rates and inflation affect plan participants in defined contribution (“DC”) plans.
The report found that retirees and near-retirees are generally more exposed to interest rate and inflation risks in their portfolios, given their higher levels of fixed income holdings and shorter investment horizons.
The report goes on to highlight some of the retirement income strategies that have been gaining traction and may help mitigate the effects of low interest rates and rising inflation for DC plans — including maximizing government-provided income, offering deferred fixed annuities attached to a target date fund (“TDF”) series, and/or offering a guaranteed lifetime withdrawal benefit attached to a TDF series.
To read the full report, click on more information:
