Plan Design
DC/DB: Key topics for 2022

As market dynamics and geopolitical events continue to evolve, it’s important for plan sponsors to reevaluate a few key items.

Know your plans

Do your employees understand their retirement plan(s)? Do they value them? Are all segments of your population benefiting from the current design? Do different demographic sectors — race, gender, job type, ethnicity, age — benefit equally? How do you know? Increasing your knowledge about your employees can help you prioritize your budget into areas that can help the most.

Defined contribution (DC) plans

  • Environmental, Social and Governance (ESG): Understand how your existing investment managers incorporate ESG factors. Does the U.S. Department of Labor (DOL) guidance provide the appropriate level of fiduciary comfort? Is a stand-alone ESG option reasonable?
  • Qualified Default Investment Alternative (QDIA): A fiduciary should be well-versed in the QDIA. Does it work for retired participants? How does your manager view and protect against inflation?
  • Retirement paycheck: Many participants are looking for support to create a retirement paycheck. Consider encouraging retiring participants to stay in plan. Retirement income options could include your QDIA, investment options that are liquid with a flexible payout and/or investment options with guarantees.

Defined benefit (DB) plans

Funded status improvement

  • Although 2022 appears to be a volatile year, the funded status of many plans experienced dramatic improvement during 2021. How can plans make the most of this windfall?

Higher inflation

  • How should portfolios adapt to potentially higher inflation? What sorts of relationships to the yield curve should be considered? Do public and corporate DB plans need to think about these issues differently?

PBGC premiums increase again

  • Two separate pieces of 2021 legislation diminished future funding requirements for corporate DB plans. But with Pension Benefit Guaranty Corporation (PBGC) premiums on the rise, should plans contribute more, and maybe even borrow to do so?

Capital Group's Retirement Strategy & Solutions Group

Members of our Retirement Strategy & Solutions Group are available to discuss these topics or any other DC/DB issues that are important to you. Email us at

Learn more about
Plan Design
Defined Benefit
Defined Contribution
Liability-Driven Investing
Retirement Income

Don’t miss out

Get the Capital Ideas newsletter in your inbox every other week

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
Use of this website is intended for U.S. residents only.
On or around July 1, 2024, American Funds Distributors, Inc. will be renamed Capital Client Group, Inc.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.