Defined Contribution Insights | Capital Group

Defined Contribution Insights



Defined Contribution Investment Perspectives

Make plan investment decisions that advance participant outcomes.



How HSAs Can Enhance Retirement Security

Rising medical costs could make Health Savings Accounts a key part of a long-term retirement strategy. Learn what plan sponsors can do to help participants.

Additional Insights

Resources to stay ahead in the defined contribution marketplace.


CE Credit Video: The Target Date Landscape and Glide Path Construction

For over 10 years, target date funds have been a Qualified Default Investment Alternative (QDIA) for defined contribution plans. Brad Vogt, American Funds portfolio manager and principal investment officer for American Funds Target Date Retirement Series® joined other investment professionals in an Asset TV Masterclass video to discuss target date funds, including:

Continue reading...


Ingredients Matter in a Target Date Series

Discussions about a target date series often center on the glide path. Less attention has been paid to the underlying equity and bond funds used within the glide path. In this video, Alan Berro — who helps oversee American Funds Target Date Retirement Series® — explains why the results of those underlying funds can dramatically affect investor outcomes.

Alan Berro, who helps oversee American Funds Target Date Retirement Series, discusses the importance of quality underlying funds in a target date series. The underlying investment strategies can dramatically affect outcomes for investors. 

Watch Video


A Powerful Approach to Target Date Fund Evaluation

American Funds Target Date ProView® tool provides a fast, powerful online platform to help analyze and compare target date fund series for a defined contribution retirement plan. It also provides you, as a retirement plan intermediary, with a way to differentiate yourself and increase the value you can deliver to your clients. 

Continue reading...

DEFINED CONTRIBUTION INSIGHTS  |  November 2017  |  FEATURING Jeanell Novak & Rich Lang

Ingredients Matter: The Critical Role of Underlying Funds in Target Date

Discussions about a target date series often center on the glide path. Less attention has been paid to the ingredients used to create the glide path — the underlying equity and bond funds.

Continue reading...


Does Your Target Date Series Have “Fantastic” Underlying Funds?

A target date series is only as good as its underlying funds. This infographic illustrates just how “Fantastic” the underlying funds of the American Funds Target Date Retirement Series℠ have been.

Continue reading...

  • Download
September 2017
 |  FEATURING John Doyle

CE Credit Video Excerpt: Measuring Plan Investment Success

In this video clip from the Asset TV Masterclass Best Practices for Defined Contribution Plan Design, American Funds senior retirement strategist John Doyle discusses how to measure investment success for a defined contribution plan:

Watch the full Masterclass video on Asset TV and earn CE credit.

Watch Video (1:07)

August 2017
 |  FEATURING Joanna F. Jonsson

CE Credit Video Excerpt: Building and Protecting Wealth Through Retirement

In this Video from the AssetTV Masterclass, American Funds portfolio manager Jody Jonsson explains why it is important for a target date fund to be designed to build and protect wealth through retirement.

Watch the full “Masterclass” video on Asset TV and earn continuing education credit.

Watch Video (2:28)

July 2017
 |  FEATURING Craig Duglin , Wesley Phoa & Rich Lang

A Look Into the Target Date ProView℠ Tool

In its 2013 guidance on target date funds, the U.S. Department of Labor stressed the importance of thoroughly understanding a series’ asset allocation, fees and results. Yet evaluating target date funds can be complex given the diversity of offerings in the marketplace. An online tool, Target Date ProView, aims to make that process easier by providing insightful, objective data to compare target date series. In this video, Capital Group investment specialist Rich Lang and portfolio manager Wesley Phoa outline key criteria for evaluating target date funds and explain how Target Date ProView can help. Learn about:

  • Best practices for target date evaluation.
  • How ProView can help advisors and sponsors meet fiduciary responsibilities per the DOL tips.
  • The importance of analyzing the types of equities and bonds used in the glide path.
  • An insightful metric that can assess how well a series has held up in down markets.

Watch Video (8:30)

July 2017
 |  FEATURING Craig Duglin , James B. Lovelace & Rich Lang

A Different Way of Investing: What Makes American Funds Target Date Retirement Series Special

American Funds Target Date Retirement Series® celebrated its 10-year anniversary this year. In this video, Jim Lovelace, member of the Portfolio Oversight Committee, and Rich Lang, target date investment specialist, share their thoughts on:

  • Why the series was designed with above-average equity exposure.
  • The three-pronged approach to reducing market risk volatility.
  • How the role of the Portfolio Oversight Committee differs from a more traditional portfolio manager.
  • The funds’ asset class flexibility as market conditions change.
  • What investors might see over the next 10 years in financial markets.

Watch Video

July 2017
 |  FEATURING Bradley J. Vogt & Craig Duglin

Target Date at 10 Years: What’s Worked in Target Date Funds

The Pension Protection Act took effect 10 years ago, leading to a surge of assets into target date funds. In this video, principal investment officer of American Funds Target Date Retirement Series® Brad Vogt shares his thoughts on what we’ve learned over the past 10 years, including:

  • The shift toward greater allocations to equity among many target date series. 
  • Why an unbalanced focus on fees can potentially be detrimental to participant outcomes. 
  • The benefits of having flexible global and multi-asset funds.
  • Managing investment risk in the years leading up to retirement.
  • What makes American Funds Target Date Series different and successful in the 10 years since its launch. 

Watch Video (6.53)


Ten Years on Target: What’s Worked in Target Date Funds

What have we learned about target date funds in the 10 years since the Pension Protection Act took effect, driving a surge in target date assets? Brad Vogt, principal investment officer of American Funds Target Date Retirement Series®, provides some insights to help plan sponsors and advisors evaluate target date funds. He discusses:

Continue reading...


Make DC Easy: Go Global

The Rise of Foreign Markets More than half of global market capitalization is non-U.S.

Sources: MSCI as of August 31, 2016. International Monetary Fund, World Economic Outlook April 2016.

Including global strategies in plan menus can increase diversification and investment opportunities.

Home bias (a significant over investment in one’s home country) has been a long-entrenched pattern in self-directed defined contribution (DC) plans. A decade of efforts by plan sponsors in the U.S., including the addition of international funds to retirement plan menus, has failed to successfully spur participants to increase their exposure to non-U.S. assets; the result is that participants are missing out on potentially attractive investment opportunities abroad, including in emerging markets. At the same time, plan sponsors are grappling with the phenomenon of choice overload, as more than a decade of behavioral finance research has shown that the expansion of menu options has proved overwhelming for participants, creating confusion and inertia.

Continue reading...


Legal Insights: Passive Does Not Reduce Fiduciary Liability

Recent Department of Labor (DOL) emphasis on fees combined with numerous 401(k) plan fee-related lawsuits have led some plan fiduciaries to question whether offering actively managed funds is riskier than passive funds that are typically less expensive.

Continue reading...

Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and/or returns will vary, so investors may lose money. Investing for short periods makes losses more likely. View fund expense ratios and returns. 

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 or the collective investment trust's Characteristics statement, which can be obtained from a financial professional, Capital or your relationship manager, and should be read carefully before investing. 

Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Small-company stocks entail additional risks, and they can fluctuate in price more than larger company stocks. 

The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as more fully described in the prospectus. 

Each target date fund is composed of a mix of the American Funds and is subject to the risks and returns of the underlying funds. Underlying funds may be added or removed during the year. Although the target date funds are managed for investors on a projected retirement date time frame, the funds' allocation strategy does not guarantee that investors' retirement goals will be met. The target date is the year in which an investor is assumed to retire and begin taking withdrawals. American Funds investment professionals manage the target date fund's portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the fund gets closer to its target date. Investment professionals continue to manage each fund for 30 years after it reaches its target date. 

Because Class R-6 shares do not include any recordkeeping payments, expenses are lower and results are higher. Other share classes that include recordkeeping costs have higher expenses and lower results than Class R-6. 

Investment results assume all distributions are reinvested and reflect applicable fees and expenses. 

For the funds listed below, the investment adviser is currently reimbursing a portion of the funds' fees or expenses, without which the results would have been lower and net expenses higher.

* American Funds Emerging Markets Bond Fund, American Funds Strategic Bond Fund, American Funds Retirement Income Portfolio Series funds and American Funds 2060 Target Date Retirement Fund (through at least April 7, 2018)

* American Funds Corporate Bond Fund (through at least August 1, 2018)

The investment adviser may elect at its discretion to extend, modify or terminate the reimbursements at that time. Please see each fund's most recent prospectus for details.


Expense ratios are as of each fund's prospectus. 

Content contained herein is not intended to serve as impartial investment or fiduciary advice. The content has been developed by Capital Group, which receives fees for managing, distributing and/or servicing its investments.

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. 

Past results are not predictive of results in future periods.

Capture ratios reflect the annualized product of fund vs. index returns for all months in which the index had a positive return (upside capture) or negative return (downside capture).