Company's 401(k) Plan.
01 December 2011
Allan Henriques and Nobel Laureate Robert Merton Discuss Innovative Retirement Planning StrategyAllan Henriques, Smart Investor’s President and Chief Executive Officer, recently met with Robert Merton, winner of the Nobel Prize in economics, to discuss the pending launch of the Dimensional Managed DC retirement program. A select group of registered investment advisors participated in the meeting, which was help in late October in Santa Monica.
In 1997, Merton received the Nobel Prize for his work on developing a new method to determine the value of derivatives. His research focuses on finance theory including lifecycle finance, optimal intertemporal portfolio selection, capital asset pricing, pricing of options, risky corporate debt, loan guarantees, and other complex derivative securities. He has also written on the operation and regulation of financial institutions.
Currently, Merton is a Distinguished Professor of Finance at MIT’s Sloan School of Management. Previously, he was the George Fisher Baker Professor of Business Administration and John and Natty McArthur University Professor at the Harvard Business School.
Over the past few years Merton has been designing and overseeing the development of the Dimensional Managed DC, a personalized, risk-managed retirement plan solution structured to provide retirees with inflation-protected income stream for life. The new program has been successfully tested by a major European employer and is scheduled to launch in the U.S. in 2012.
Allan and Bob discussed the practical application and benefits of this new retirement plan approach, which is designed to help people maintain a comfortable standard of living in retirement. Although the structure combines the most desirable aspects of defined benefit and defined contribution retirement plans, the employer does not bear the risks associated with offering employees a traditional pension plan. This approach is also different from other retirement income solutions because it implements a personalized retirement plan for each participant that is created to:
- Achieve that individual’s retirement goals.
- Manage investment decisions to achieve those goals.
- Provide an inflation-protected lifetime income stream.
If you would like more information about the Managed DC program and how it might benefit your company’s retirement plan and employees, please give Allan a call at 916-435-2100.