Rethinking Target-Date Fund Design: Managing Participant Risk
This paper explains the thinking behind Prudential's Day One Funds, our family of target date funds created to address the retirement risks we all face – with a particular focus on longevity risk.
According to a 2014 Prudential study, 75% of respondents say their top financial goal is “not to run out of money in retirement.” This paper examines how Prudential’s family of target date funds, our Day One Funds, take on that challenge by addressing key retirement risks we all face – investment risk, inflation risk, sequence-of-returns risk and longevity risk. Based on more than 85 years of experience working with thousands of retirement plans, millions of plan participants, and leading investment managers and financial behavior experts, our Day One Funds reflect Prudential's commitment to help participants plan confidently for their Day One of retirement -- and all the days to come.
Srinivas D. Reddy, CFA - Senior Vice President, Full Service Investments, Prudential Retirement; Clint Barker, CIMA -- Senior Vice President, Retirement Investment Solutions, Prudential Investments LLC; Stephen Brundage, CFA -- Managing Director, Quantitative Management Associates