Safeguarding DC assets
Some economists fear that recent monetary policy could spur inflation once the economy improves.
Sources: Mercer, Vanguard Group
According to Mercer's latest survey, more than half of DC plans do not currently offer inflation-protection strategies and do not have plans to do so.*Treasury Inflation-Protected Securities.
Participants in larger plans are much more likely to be protected from inflation risk, Mercer found.
Among 'non-core' strategies offered as stand-alone options that protect against inflation, it appears U.S. real estate investment trusts will remain the most popular.
A Vanguard survey shows only 5% of partici- pants who are offered bond funds made up of inflation-protection securities are using them.
With an estimated $4.7 trillion in U.S. defined contribution assets, surveys show there is a need for more offerings to protect this enormous asset pool.