Using Alternatives in Defined Contribution Plans

While defined benefit plans have relied on alternatives for decades, there is increased interest and usage of alternative investments in defined contribution DC plans. Alternatives are attractive to participants and sponsors looking to more effectively diversify investments, potentially reduce overall volatility and potentially increase total returns.

Sponsors may want to consider a multi-alternative portfolio that packages different alternative strategies and assets in a single fund. This approach can help provide the desired alternative investment exposure and reduce menu clutter. It will also help protect against participant “user error” (selecting the wrong alternative strategy/asset) and ease participant education efforts.

  • Using Alternatives in Defined Contribution Plans
    This white paper examines the increased interest and usage of alternative investments in DC plans. Alternatives may be attractive to participants and sponsors looking to diversify investments, potentially reduce overall volatility and potentially increase total returns. Sponsors may want to consider a multi-alternative portfolio that packages different alternative strategies and assets in a single fund.