Читать книгу Successful Defined Contribution Investment Design - Gao Ying - Страница 19

A key tenet of PIMCO’s own DC principles is that success is defined as “building and preserving purchasing power to meet retirement income needs for the majority of participants, regardless of the prevailing economic environment.” This definition has a subtle but incredibly important undertone, namely that the average outcome for participants is not enough on its own as an objective. Instead, as shown in Figure 1.1, the distribution of those outcomes across participants is critical. Think of it as a principle: Avoiding failure for some is as important as marginal gains for the majority. Said another way, we seek good outcomes for all plan participants. This principle requires a success metric (and accordingly an objective threshold to be defined) for avoiding failure, not just for achieving success. In Figure 1.1, we show people on the left standing in a shadow; this represents a probability distribution of those who may fail to reach 30 percent income replacement. You’ll see on this distribution that there are many on the right who may achieve more than 75 percent income replacement. We believe plans should set a target income replacement level and design their plans to minimize the risk of failure (i.e., people in the shadow) even if that means they will reduce extreme winners (i.e., people on the right).